Institutions, Behavior and Evolution

The three articles constituting this thesis are for reasons of content or method related to the following three fields in economics: Behavioral Economics, Evolutionary Game Theory and Formal Institutional Economics. A core element of these fields is the concept of individual preferences. Preferences are of central importance for the conceptional framework to analyze human behavior. They form the foundation for the theory of rational choice which is defined by the determination of the choice set and the selection of the most preferred alternative according to some consistency requirements. The theory of rational choice is based on a very simplified description of the problem of choice (object function and constraints). However, that choices depend on many more factors is for instance propagated by psychological theories and is supported by many empirical and experimental studies. This thesis adds to a better understanding of individual behavior to the extent that the evolution of certain characteristics of preferences and their consequences on human behavior forms the overarching theme of the dissertation. The long-term effect of evolutionary forces on a particular characteristic of importance in the theoretical, empirical and experimental economic literature, the concept of inequality aversion, is subject of the article “The evolution of inequality aversion in a simplified game of life” (Chapter 4). The contribution of the article is the overcoming of a restriction of former approaches to analyze the evolution of preferences in very simple environments. By classifying human interaction into three central economic games, the article provides a first step towards a simplified and sufficiently complete description of the interaction environment. Within such an environment the article characterizes the evolutionary stable preference distribution. One result shows, that the interaction of the aforementioned three classes can stabilize a preference of inequality aversion in the subpopulation which is favored in the problem of redistribution. The two remaining articles are concerned with social norms, which dissemination is determined by medium-run forces of cultural evolution. The article “The impact of market innovations on the evolution of social norms: the sustainability case.“ (Chapter 2) studies the interrelation between product innovations which are relevant from a sustainability perspective and an according social norm in consumption. This relation is based on a conformity bias in consumption and the attempt to avoid cognitive dissonances resulting from non-compliant consumption. Among others, it is shown that a conformity bias on the consumption side can lead to multiple equilibria on the side of norm adoption. The article “Evolution of cooperation in social dilemmas: signaling internalized norms.” (Chapter 3) studies the emergence of cooperation in social dilemmas based on the signaling of social norms. The article provides a potential explanation of cooperative behavior, which does not rely on the assumption of structured populations or on the unmotivated ability of social norms to restrict individual actions or strategy spaces. A comprehensive result of the single articles is the explanation of the phenomenon of partial norm adaption or dissemination of preferences. The plurality of the applied approaches with respect to the proximity to the rational choice approach and regarding the underlying evolutionary mechanics is a particular strength of the thesis. It shows the equality of these approaches in their potential to explain the phenomenon of cooperation in environments that provide material incentives for defective behavior. This also points to the need of a unified framework considering the biological and cultural coevolution of preference patterns.

Improving food and nutritional security of small and marginal coconut growers through diversification of crops and enterprises

This paper presents the impact of integrating interventions like nutrition gardening, livestock rearing, product diversification and allied income generation activities in small and marginal coconut homesteads along with nutrition education in improving the food and nutritional security as well as the income of the family members. The activities were carried out through registered Community Based Organizations (CBOs) in three locations in Kerala, India during 2005-2008. Data was collected before and after the project periods through interviews using a pre-tested questionnaire containing statements indicating the adequacy, quality and diversity of food materials. Fifty respondents each were randomly selected from the three communities, thereby resulting in a total sample size of 150. The data was analysed using SPSS by adopting statistical tools like frequency, average, percentage analysis, t – test and regression. Participatory planning and implementation of diverse interventions notably intercropping and off-farm activities along with nutrition education brought out significant improvements in the food and nutritional security, in terms of frequency and quantity of consumption as well as diet diversity. At the end of the project, 96%of the members became completely food secure and 72% nutritionally secure. The overall consumption of fruits, vegetables and milk by both children and adults and egg by children recorded increase over the project period. Consumption of fish was more than the Recommended Dietary Intake (RDI) level during pre and post project periods. Project interventions like nutrition gardening could bring in surplus consumption of vegetables (35%) and fruits (10%) than RDI. In spite of the increased consumption of green leafy vegetables and milk and milk products over the project period, the levels of consumption were still below the RDI levels. CBO-wise analysis of the consumption patterns revealed the need for location-specific interventions matching to the needs and preferences of the communities.

Labelling schemes for organic food: Consumer attitudes, preferences and willingness-to-pay in six European countries

Since July 2010, all pre-packed organic food produced in the European Union (EU) must carry the new mandatory EU logo for organic food. Voluntary organic labels (such as national governmental logos and logos of private farmers’ associations and control bodies) can still be used, but only in addition to the mandatory EU logo. This change in the regulatory environment of organic labelling raises a number of questions regarding consumer preferences for different kinds of organic certification logos, which the present dissertation addressed. The first objective was to explore and analyse consumer perceptions, attitudes, preferences and willingness-to-pay (WTP) regarding different voluntary organic labels. The second objective was to investigate consumer perceptions and attitudes towards a mandatory EU logo. A combination of qualitative and quantitative methods of consumer research in six European countries was employed including focus group discussions, choice experiments and structured interviews. Based on the empirical results, recommendations are drawn for different actors in the organic sector.

Attitudes and behaviour towards food attributes and organic food – a triangular methodological investigation of occasional organic consumers

Organic food is increasingly available in the conventional food retail, where organic products are offered alongside with various other types of products and compete mainly with conventional and the so-called conventional-plus products. The latter are conventional products displaying particular quality attributes on the product packaging, such as ‘no artificial additives’, or ‘from animal welfare husbandry’. Often, these quality attributes also apply to organic products. Occasional organic consumers might prefer such conventional-plus alternatives that are perceived to be ‘between’ organic and conventional products. The overall objective of this PhD thesis was to provide information about the segment of occasional organic consumers. In particular, the thesis focussed on consumer perceptions and attitudes towards the quality of, and preferences for, organic, conventional and conventional-plus products in two countries: Germany and Switzerland. To achieve these objectives, qualitative and quantitative consumer research was combined in order to explore occasional organic consumers’ perceptions and attitudes as well as to observe their preferences and buying behaviour regarding different types of food products: organic, conventional and conventional-plus products. The qualitative research showed that, depending on single criteria, organic production was both positively as well as negatively assessed by consumers. Consumer perception of organic food was found to be highly selective and primarily focussed on the final stage of the particular production process. A major problem is that consumers are still mostly unfamiliar with factors associated with organic production, have a lack of confidence, and often confuse organic with conventional products. Besides this, consumer expectations of organic products are different from the expectations of conventional products. The quantitative research revealed that attitudes strongly determine consumers’ preferences for organic, conventional and conventional-plus products. Consumer attitudes tended to differ more between organic and conventional choices rather than conventional-plus and conventional choices. Furthermore, occasional organic consumers are heterogeneous in their preferences. They can be grouped into two segments: the consumers in one segment were less price sensitive and preferred organic products. The consumers in the other segment were more price sensitive and rather preferred conventional-plus or conventional products. To conclude, given the selective and subjective nature of consumer perception and the strong focus of consumer perception on the final stage of the food production process, specific additional values of organic farming should be communicated in clear and catchy messages. At the same time, these messages should be particularly focussed on the final stage of organic food production. The communication of specific added values in relation with organic products to improve the perceived price-performance-ratio is important since conventional-plus products represent an interesting alternative particularly for price sensitive occasional organic consumers. Besides this, it is important to strengthen affirmative consumer attitudes towards organic production. Therefore, policy support should emphasise on long-term communication campaigns and education programmes to increase the consumer awareness and knowledge of organic food and farming. Since consumers expect that organic food is regionally or at least domestically produced while they less accept organic imports, policy support of domestic and regional producers is a crucial measure to fill the current gap between the increasing consumer demand of organic food and the stagnation of the domestic and regional organic food supply.

Organic consumers' attitudes and preferences regarding alternatives to piglet castration without anaesthesia and analgesia in organic farming - an explorative analysis

In Germany and other European countries piglets are routinely castrated in order to avoid the occurrence of boar taint, an off-flavour and off-odour of pork. Sensory perception of boar taint varies; however, it is regarded as very unpleasant by many people. Surgical castration which is an effective means against boar taint has commonly been performed without anaesthesia or analgesia within the piglets’ first seven days of life. Piglet castration without anaesthesia has been heavily criticised, as the assumption that young piglets perceive less pain than older animals cannot be supported by scientific evidence. Consequently, surgical castration is only allowed with anaesthesia and/or analgesia in organic farming throughout the European Union since January 2012. Abandoning piglet castration without pain relief requires the implementation of alternative methods which improve animal welfare while maintaining sensory meat quality. There are three relevant alternatives: castration with anaesthesia and/or analgesia to reduce pain, a vaccination against boar taint (immunocastration) and the fattening of uncastrated male pigs (fattening of boars) combined with measures to reduce and detect boar taint in meat. Consumers’ attitudes and opinions regarding the alternatives are an important factor with regard to the implementation of alternatives, as they are finally supposed to buy the meat. The objective of this dissertation was to explore organic consumers’ attitudes, preferences and willingness-to-pay regarding piglet castration without pain relief and the three alternatives. Important aspects for the evaluation of the alternatives and influencing factors (e.g. information, taste) on preferences and willingness-to-pay should also be identified. In autumn 2009 nine focus group discussions were conducted each followed by a Vickrey auction including a tasting of boar salami. Overall, 89 consumers of organic pork participated in the study. Information on piglet castration and alternatives (in three variants) was provided as a basis for discussion. The focus group data were analysed using qualitative content analysis. In order to compare the focus group results with those from the auctions, an innovative approach applying an adapted scoring model to further analyse the data set was used. The majority of participants were not aware that piglets are castrated without anaesthesia in organic farming. They reacted shocked and disappointed on learning about this practice which did not fit into their image of animal welfare standards in organic farming. Overall, the results show, that for consumers of organic pork castration with anaesthesia and analgesia as well as the fattening of boars may be acceptable alternatives in organic farming. Considering the strong food safety concerns regarding immunocastration, acceptance of this alternative may be questioned. Communication regarding alternatives to piglet castration without anaesthesia and analgesia should take into account that the relevance of the aspects animal welfare, food safety, taste and costs differs between alternatives. Furthermore, it seems advisable not to address an unappetizing topic like piglet castration directly at the point of sale so as not to deter consumers from buying organic pork. The issue of piglet castration demonstrates exemplarily that it is important for the organic sector to implement and maintain high animal welfare standards and communicate them in an appropriate way, thereby trying to prevent strong discrepancies between consumers’ expectations regarding animal husbandry in organic farming and actual conditions. So, disappointment of consumers and a loss of image due to negative reports about animal welfare issues can be avoided.

Individuals' (re-)action in the face of global warming

Climate change remains a major challenge for today’s and future societies due to its immense impacts on human lives and the natural environment. This thesis investigates the extent to which individuals are willing and prepared to voluntarily contribute to climate protection and to adjust to new climatic conditions in order to cope with the consequences of climate change and reduce the severity of potential negative impacts. The thesis thereby combines research in the fields of the private provision of environmental public goods and adaptation to climate change, which is still widely unconnected in the existing literature. The six contributions of this thesis mainly focus on microeconometric analyses using data from international surveys in China, Germany, and the USA. The main findings are: (i) A substantial share of individuals is willing to voluntarily contribute to climate protection and to adapt to climatic change. The engagement in both strategies is positively interrelated at the individual level and the analyses reveal hardly any evidence that adaptation activities crowd out individuals’ incentives to engage in climate protection. (ii) The main determinants of individuals’ adaptation activities seem to be the subjective risk perception as well as socio-economic and socio-demographic characteristics like age, gender, education, and income, while their climate protection efforts are found to be broadly motivated by financial advantages from these activities and additional immaterial benefits. (iii) The empirical findings also suggest a significantly positive relationship between certain climate protection activities. Substitutions are found to occur merely if one measure is perceived to be more effective in providing climate protection or if individuals have high environmental preferences. (iv) This thesis further reveals a common understanding of a (normatively) fair burden-sharing in international climate policy across citizens in China, Germany, and the USA. The highest preferences are found for the accountability principle.