Consumer Willingness to Pay Price Premiums for Credence Attributes of Livestock Products – A Meta‐Analysis

Abstract

Livestock products, such as dairy and beef, are increasingly regarded as resource intensive and concerns are raised about animal welfare and environmental sustainability. As a result, consumer awareness of these issues has led to an increasing demand for products with high quality credence attributes (CAs) that cannot be directly experienced or identified. A number of empirical studies have attempted to estimate consumers' willingness to pay (WTP) for CAs, which represents the additional value placed on the benefits that they derive from those products. However, there are significant differences in these WTP estimates, mainly because both consumers' perceptions of CAs and the conditions of the studies vary. We conduct a meta-analysis to examine consumers' WTP for different CAs of livestock products based on a systematic review of relevant studies. Meta-regression models are used to control for the heterogeneity of WTP estimates and investigate factors that affect the estimation of WTP. Overall 555 estimates derived from 94 papers reporting WTP are included in this study. Meta-regression results establish the presence of systematic WTP variation associated with types of products, CAs, and locations, though also indicate that WTP is subject to systematic variation associated with study methodology.

Challenges and Opportunities for Land Use Transformation: Insights from the Central Plains Water Scheme in New Zealand

“…The findings suggest that there is a role for facilitating what might be described as collective action in market formation [46]. These markets could, for example, relate to capturing value back to producers from the apparent willingness to pay premiums for products with credence attributes [47].…”

Gaining Trust in the Digital Age: The Potential of Social Media for Increasing the Competitiveness of Small and Medium Enterprises

“…Such effects go hand in hand with a higher willingness of consumers to pay (WTP) for products having such attributes, ensuring price premiums for producers. Examples for such behavior can also be found among food industries [28,29]. However, the previously explained influence of eWOM in an online environment depends on the type of attributes in question.…”

The Role of Geographical Indications in Agricultural Sustainability and Economic Development

“…GIs can play an important role in signalling the quality of goods to consumers [33]. Among the attributes of a product which are signalled by GIs is 'credence' or the integrity of product origin and sustainable production methods [34][35][36]. This is particularly the case where the GI is underpinned by a registration and certification system enabling producers to signal quality and an associated reputation that has been developed over time [37,38].…”