Demand, supply and willingness-to-pay for extension services in an emerging-market setting

Although it may be wholly inappropriate to generalize, the most important resource available to a subsistence household is the total amount of time that its members have available to spend in productive enterprises. In this context, services that minimize the time that it takes to perform productive activities are valuable to the household. Consequently the household is willing to relinquish quantities of other resources in exchange for quantities of the time-saving service. These simple observations motivate a search for the values that subsistence households place on time-saving services. This search is especially important when it is realized that extension services promote productivity, enhance the surplus-generating potential of the household and can, as a consequence, promote immersion into markets that are currently constrained by thinness and instability. In this capacity, extension visitation has the potential to overcome one of the principal impediments to economic development, namely lack of density of market participation. In this article, we consider this issue in the context of a rich data set on milk-market participation by small-holder dairy producers in the Ethiopian highlands.

Consumers' attitudes, trust and willingness to pay for food information

Market failure can be corrected using different regulatory approaches ranging from high to low intervention. Recently, classic regulations have been criticized as costly and economically irrational and thus policy makers are giving more consideration to soft regulatory techniques such as information remedies. However, despite the plethora of food information conveyed by different media there appears to be a lack of studies exploring how consumers evaluate this information and how trust towards publishers influence their choices for food information. In order to fill such a gap, this study investigates questions related to topics which are more relevant to consumers, who should disseminate trustful food information, and how communication should be conveyed and segmented. Primary data were collected both through qualitative (in depth interviews and focus groups) and quantitative research (web and mail surveys). Attitudes, willingness to pay for food information and trust towards public and private sources conveying information through a new food magazine were assessed using both multivariate statistical methods and econometric analysis. The study shows that consumer attitudes towards food information topics can be summarized along three cognitive-affective dimensions: the agro-food system, enjoyment and wellness. Information related to health risks caused by nutritional disorders and food safety issues caused by bacteria and chemical substances is the most important for about 90% of respondents. Food information related to regulations and traditions is also considered important for more than two thirds of respondents, while information about food production and processing techniques, life style and food fads are considered less important by the majority of respondents. Trust towards food information disseminated by public bodies is higher than that observed for private bodies. This behavior directly affects willingness to pay (WTP) for food information provided by public and private publishers when markets are shocked by a food safety incident. WTP for consumer association (€ 1.80) and the European Food Safety Authority (€ 1.30) are higher than WTP for the independent and food industry publishers which cluster around zero euro. Furthermore, trust towards the type of publisher also plays a key role in food information market segmentation together with socio-demographic and economic variables such as gender, age, presence of children and income. These findings invite policy makers to reflect on the possibility of using information remedies conveyed using trusted sources of information to specific segments of consumers as an interesting soft alternative to the classic way of regulating modern food markets.

Investigating the value dairy farmers place on a reduction of lameness in their herds using a willingness to pay approach

A survey was conducted to elicit dairy farmers’ willingness to pay (WTP) to reduce the prevalence of lameness in their herds. A choice experiment questionnaire was administered using face-to-face interviews of 163 farmers in England and Wales. Whole herd lameness assessments by trained researchers recorded a mean lameness prevalence of nearly 24% which was substantially higher than that estimated by farmers. Farmers’ responses to a series of attitudinal questions showed that they strongly agreed that cows can suffer a lot of pain from lameness and believed that they could reduce lameness in their herds. Farmers’ mean WTP to avoid lameness amounted to UK£411 per lame cow but with considerable variation across the sample. Median WTP of UK£249 per lame cow was considered a better measure of central tendency for the sample. In addition, the survey found that farmers had a substantial WTP to avoid the inconvenience associated with lameness control (a median value of UK£97 per lame cow) but that they were generally prepared to incur greater inconvenience if it reduced lameness. The study findings suggest that farmers need a better understanding of the scale and costs of lameness in their herds and the benefits of control. To encourage action, farmers need to be convinced that lameness control measures perceived as inconvenient will be cost effective.

Willingness to pay for contagious bovine pleuropneumonia vaccination in Narok South District of Kenya

Contagious bovine pleuropneumonia (CBPP) is an economically important trans-boundary cattle disease which affects food security and livelihoods. A conjoint analysis–contingent valuation was carried out on 190 households in Narok South District of Kenya to measure willingness to pay (WTP) and demand for CBPP vaccine and vaccination as well as factors affecting WTP. The mean WTP was calculated at Kenya Shillings (KSh) 212.48 (USD 3.03) for vaccination using a vaccine with the characteristics that were preferred by the farmers (preferred vaccine and vaccination) and KSh −71.45 (USD −1.02) for the currently used vaccine and vaccination. The proportion of farmers willing to pay an amount greater than zero was 66.7% and 34.4% for the preferred and current vaccine and vaccination respectively. About one third (33.3%) of farmers would need to be compensated an average amount of KSh 1162.62 (USD 13.68) per animal to allow their cattle to be vaccinated against CBPP using the preferred vaccine and vaccination. About two-thirds (65.6%) of farmers would need to be compensated an average amount of KSh 853.72 (USD 12.20) per animal to allow their cattle to be vaccinated against CBPP using the current vaccine and vaccination. The total amount of compensation would be KSh 61.39 million (USD 0.88 million) for the preferred vaccine and vaccination and KSh 90.15 million (USD 1.29 million) for the current vaccine and vaccination. Demand curves drawn from individual WTP demonstrated that only 59% and 27% of cattle owners with a WTP greater than zero were willing to pay a benchmark cost of KSh 34.60 for the preferred and current vaccine respectively. WTP was negatively influenced by the attitude about household economic situation (p = 0.0078), presence of cross breeds in the herd (p < 0.0001) and years since CBPP had been experienced in the herd (p = 0.0375). It was positively influenced by education (p = 0.0251) and the practice of treating against CBPP (p = 0.0432). The benefit cost ratio (BCR) for CBPP vaccination was 2.9–6.1 depending on the vaccination programme. In conclusion, although a proportion of farmers was willing to pay, participation levels may be lower than those required to interrupt transmission of CBPP. Households with characteristics that influence WTP negatively need persuasion to participate in CBPP vaccination. It is economically worthwhile to vaccinate against CBPP. A benefit cost analysis (BCA) using aggregated WTP as benefits can be used as an alternative method to the traditional BCA which uses avoided production losses (new revenue) and costs saved as benefits.

Stated willingness-to-pay for organic fruit and pesticide ban: an evaluation using both web-based and face-to-face interviewing

Income growth in highly industrialised countries has resulted in consumer choice of foodstuffs no longer being primarily influenced by basic factors such as price and organoleptic features. From this perspective, the present study sets out to evaluate how and to what extent consumer choice is influenced by the possible negative effects on health and environment caused by the consumption of fruit containing deposits of pesticides and chemical products. The study describes the results of a survey which explores and estimates consumer willingness to pay in two forms: a yearly contribution for the abolition of the use of pesticides on fruit, and a premium price for organically grown apples guaranteed by a certified label. The same questionnaire was administered to two samples. The first was a conventional face-to-face survey of customers of large retail outlets located around Bologna (Italy); the second was an Internet sample. The discrete choice data were analysed by means of probit and tobit models to estimate the utility consumers attribute to organically grown fruit and to a pesticide ban. The research also addresses questions of validity and representativeness as a fundamental problem in web-based surveys.

Willingness-to-pay for a probabilistic flood forecast: a risk-based decision-making game

Probabilistic hydro-meteorological forecasts have over the last decades been used more frequently to communicate forecastuncertainty. This uncertainty is twofold, as it constitutes both an added value and a challenge for the forecaster and the user of the forecasts. Many authors have demonstrated the added (economic) value of probabilistic over deterministic forecasts across the water sector (e.g. flood protection, hydroelectric power management and navigation). However, the richness of the information is also a source of challenges for operational uses, due partially to the difficulty to transform the probability of occurrence of an event into a binary decision. This paper presents the results of a risk-based decision-making game on the topic of flood protection mitigation, called “How much are you prepared to pay for a forecast?”. The game was played at several workshops in 2015, which were attended by operational forecasters and academics working in the field of hydrometeorology. The aim of this game was to better understand the role of probabilistic forecasts in decision-making processes and their perceived value by decision-makers. Based on the participants’ willingness-to-pay for a forecast, the results of the game show that the value (or the usefulness) of a forecast depends on several factors, including the way users perceive the quality of their forecasts and link it to the perception of their own performances as decision-makers.

Clean technology, willingness to pay and market size

This paper extends Salop’s model of localized competition by introducing the consumers’ willingness to pay (WTP) for clean products and allows an individual firm to choose between a clean or a dirty technology. We assume that a clean technology is relatively costly to adopt. The consumer is willing to pay more for a product produced with clean technology and the model can also be interpreted as a world economy model where each firm represents a country. There exists a critical value of m (proportion of firms adopting the clean technology), m*, such that if m < m* then no country adopts the clean technology, all countries adopt the clean technology only if m > m* while some countries will adopt the clean technology and some will not adopt the clean technology if m = m*. Our results also identify an example of coordination failure. Since symmetric technology adoption delivers the same level of profits as non-adoption, global coordination will be necessary to achieve the clean technology adoption outcome. Finally, we demonstrate that the
private and public (social planner) incentives to adopt clean technology differ.

A discrete choice experiment to examine the preferences of patients with cancer and their willingness to pay for different types of health care appointments

BACKGROUND: This study sought to understand the preferences of patients with cancer and the trade-offs between appointment attributes using discrete choice experiment (DCE). METHODS AND STUDY DESIGN: Patients with cancer at 3 hospitals completed a self-administered DCE. Each scenario described 6 attributes: expertise of health care professionals (HCPs), familiarity of doctors with patients' medical history, waiting time, accompaniment by family/friends, travel time, and out-of-pocket costs. Patient preferences were estimated using logistic regression. Willingness to pay (WTP) estimates were derived from regression coefficients. RESULTS: Of 512 patients contacted, 185 returned the questionnaire. The mean age was 61 years, and 60% of respondents were female. The mean time since cancer diagnosis was 34 months, 90% had received treatment; and 61% had early-stage disease. The most important attributes were expertise and familiarity of doctors with patients' medical history; distance traveled was least likely to influence patient preferences. The WTP analysis estimated that patients were willing to pay $680 (95% CI, 470-891) for an appointment with a specialist, $571 (95% CI, 388-754) for doctors familiar with their history, $422 (95% CI, 262-582) for shorter waiting times, $399 (95% CI, 249-549) to be accompanied by family/friends, and $301 (95% CI, 162-441) for shorter traveling times. Male patients had a stronger preference for accompaniment by family/friends. The expertise of HCP was the most important attribute for patients regardless of geographic remoteness. CONCLUSIONS: Our study can assist the development of patient-centered health care models that improve patient access to experienced HCPs, support the role of primary care providers during the cancer journey, and educate patients about the roles of non-oncology HCPs to cope with increasing demand for cancer care.

Consumer Perception and Willingness to Pay for Local Food

A growing number of empirical studies recently investigated consumers' valuation for local food products. However, different aspects related to the local food consumption still remain vague or unexplored. As such, the objective of the present research is to fulfill the existing literature using a mixed methodological approach for the investigation of consumers' preferences and Willingness to Pay (WTP) for local food products. First of all, local food is still a blurred concept and this factor might be source of individuals' misperception for the local origin meaning. Therefore, a qualitative research has been performed in order to investigate the meaning and the perception of the local food in the Italian food market. Results from this analysis have been used as inputs for the building of a non-hypothetical Real Choice Experiment (RCE) to estimate consumers' WTP for locally and organically produced apple sauce. The contribution of this study is three-fold: (1) consumers' valuation for the local origin is interpreted in terms of regional borders, over the organic food claim in case of an unusual food product in the area of interest, (2) the interaction between individuals' personality traits and consumers’ preferences for local and organic foods is analyzed, (3) the role of Commitment Cost creation in consumers' choice making in case of uncertainty due to the use of a novel food product and of an unconventional food claim is investigated. Results suggest that consumers are willing to pay a higher price premium for organic over locally produced apple sauce, possibly because of the presence of a regulated certification. In accordance with Commitment Cost theory, the organic label might thus decrease consumers' uncertainty for the features of the product in question. Results also indicate that individuals' personality can be source of heterogeneity in consumers' preferences.

Estimating Willingness to Pay for River Amenities and Safety Measures Associated with Shale Gas Extraction

This paper utilizes a Contingent Valuation Method survey of a random sample of residents to estimate that households are willing to pay an average of $12.00 per month for public projects designed to improve river access and $10.46 per month for additional safety measures that would eliminate risks to local watersheds from drilling for natural gas from underground shale formations. These estimates can be compared to the costs of providing each of these two amenities to help foster the formation of efficient policy decisions.