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Labels for a Local Food Speciality Product: The Case of Saffron
Author(s) -
SanjuánLópez Ana I.,
ResanoEzcaray Helena
Publication year - 2020
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/1477-9552.12376
Subject(s) - credence , willingness to pay , price premium , product (mathematics) , marketing , demographics , certification , food products , value (mathematics) , business , organic product , product differentiation , credence good , organic certification , economics , organic farming , geography , microeconomics , information asymmetry , agriculture , food science , mathematics , statistics , geometry , demography , management , chemistry , archaeology , sociology , cournot competition
We examine the potential demand for a local food speciality product, saffron, with alternative labels, using a choice experiment. The paper contributes to the literature on credence attributes, by examining Willingness to Pay (WTP) for the local, organic and PDO (Protected Designation of Origin), their differences across experimental conditions (hypothetical and non‐hypothetical), and by identifying the effects of personal characteristics, in terms of socio‐demographics and level of product involvement on the differences in WTP. We find that the local saffron speciality has an important appeal that could be better reinforced with the PDO rather than the organic labelling, and that consumers show a consistent pattern of preferences across experimental environments. WTP tends to be higher in the hypothetical setting and, in particular, consumers with relatively more knowledge and deeper roots in the territory tend to exhibit a larger WTP premium for local origin and its certification. These results may help producers improve their marketing of agri‐food products with a high gastronomic value and differentiation potential, while they warn about an overstatement of WTP for socially desirable characteristics, such as organic labelling, which is also relevant for policymakers.