Three Essays on Modeling Consumer Preferences in the Presence of Hypothetical Bias and Attribute Non-Attendance in Food Choice Experiments
The identification of the market potentials of organic products is important in the drive towards a sustainable agricultural development in SSA. However, evidence shows that valuing attributes of credence goods (organic products) while using stated preference methods faces additional obstacles compared to other normal goods. In this study, consumers’ preferences and WTP for health and environmental attributes of organic products in Nigeria is examined. This research has made three broad contributions. First, in order to adequately capture the value of organic products, part of the heterogeneity across respondents is linked to differences in scale by making use of indicators of survey engagement. Second, using a between subject approach, the impact of ex-ante hypothetical bias mitigation methods (Cheap Talk and Honesty Priming) on respondents’ ANA is investigated. Finally, sources of heterogeneous preferences (consumer segments) and market potentials for organic attributes in Nigeria is identified. The empirical results show that market for organic products exists in Nigeria, with reduction in pesticide residues attribute attracting the highest value, followed by the certification program. In other words, consumers are willing to pay premium for both health and environmental gains achieved through organic production systems, although their quantitative valuation is higher for the health concerns. Furthermore, it is observed that increases in the latent engagement variable lead to a greater probability of agreement with statements relating to survey understanding and realism, and hence more substantive output. Similarly, incidence of ANA varies across the treatments in general, with significant difference in ANA rates between respondents exposed to the mitigation strategies (HP and CT) and the baseline group. The findings from this study also reveal that the low WTP values for HP task appear to correspond with the lowest ANA rates reported for all the attributes (especially price) and might reflect a more realistic valuation of the attributes.
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