The role of production method and country-of-origin labelling in consumers' food choice

Abstract

Organic production and domestic origin of food serve for consumers as extrinsic cues for food safety and food quality dimensions. With consumers' growing interest in food quality and their increasing concern regarding food safety organic and domestic origin labeling has gained in relevance for businesses and policy makers as well as in research. Accordingly, numerous studies have investigated the effects of organic labeling (OL) and domestic origin labeling (DOL), arriving at heterogeneous results. This leads to the question whether there are any systematic patterns that can explain the difference in the magnitude and in some cases even the sign of willingness to pay (WTP) estimates for OL and DOL. The objective of this research is twofold. First, by conducting two meta-regression analyses (MRA) the thesis identifies the main determinants that drive consumers' WTP a premium for OL and DOL as derived from previous literature. Second, for Taiwan—a newly industrialized country—three empirical field studies are conducted investigating the role of trust and attitude as well as the impact of information on consumers' choice of products differentiated by OL and DOL. The studies use red sweet pepper as study object and make use of Discrete Choice Experiments (DCE) (chapters 3, 4 and 5), Best Worst Scaling (BWS) (chapter 5) as well as Propensity Score Matching (chapter 4).<br /> After a brief introduction (chapter 1), two MRA analyses are conducted (chapter 2), one in which the results of 74 WTP estimates for OL and another in which the findings of 31 WTP estimates related to DOL are considered. The research finds evidence for the presence of publication bias in both MRAs. In addition, the results reveal systematic variation of WTP estimates across underlying study characteristics such as the location the survey was conducted as well as the elicitation methods used to derive WTP estimates. <br /> Chapter 3 examines the relative importance of product and process information—country of origin, production methods, chemical residue testing (CRT) and price—for Taiwanese consumers' product choice based on a convenience sample of 290 valid responses. Results show that respondents focus mostly on country of origin labeling, followed by price. Furthermore, interaction between attributes matter and consumers' preference for attribute levels depend on socioeconomic characteristics. <br /> Given the increasing relevance of organic imported products on the Taiwanese market the impact of an equality of organic standards information treatment on Taiwanese consumers' food preference and purchasing behavior is examined in chapter 4 based on a valid sample of 800 respondents. Results indicate that information on the equality of organic standards significantly increased the purchase likelihood for Taiwan-origin organic products, while the opposite effect is detected for Chinese organic products. In addition, an increase in the utility of the opt-out option in the information treatment group was revealed. Provision of information thus failed to assure consumers about the equality of organic standards. <br /> Making use of data obtained from the same survey as in chapter 4 chapter 5 combines two elicitation techniques–DCE and BWS–to provide information about the role of consumers' attitude and trust in influencing food choice decisions. Results of linking the DCE with the BWS attitudinal dimensions reveals that consumers' attitude and trust significantly explain consumers' membership to a specific consumer segment and therefore, is of importance for understanding food purchase behavior. <br /> The main results, limitations and conclusions are summarized in chapter 6. The research presented in this thesis adds to the literature twofold. From a content point of view the studies conducted in the framework of this thesis provide a better understanding of consumer food choice behavior, specifically with regard to OL and DOL. Some of the insights are obtained by the combination of methods that so far have not been applied jointly in the literature. Therefore, the thesis also adds to the literature from a methodological point of view.