Premium
Consumers’ Valuation of Rice‐Grade Labeling
Author(s) -
Choi Young Woon,
Lee Ji Yong,
Han Doo Bong,
Nayga Rodolfo M.
Publication year - 2018
Publication title -
canadian journal of agricultural economics/revue canadienne d'agroeconomie
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 37
eISSN - 1744-7976
pISSN - 0008-3976
DOI - 10.1111/cjag.12168
Subject(s) - grading (engineering) , valuation (finance) , willingness to pay , business , contingent valuation , economics , microeconomics , engineering , finance , civil engineering
The current Korean rice‐grading system has a “no test” option that allows rice to not be graded in the market. This study examines Korean consumers’ valuation of a rice‐grading system without the “no test” option. We apply a nonhypothetical experimental auction to elicit consumers’ willingness to pay for each rice grade and identify the impact of the provision of additional grading information on product valuation. We then use contingent and inferred valuations to obtain consumers’ valuation of a mandatory rice‐grading system without the “no test” option. We find that Korean consumers are willing to pay an additional premium for each rice grade and that rice‐grading information is the most important factor that differentiates the rice products. Rice consumers in Korea also strongly prefer a mandatory rice‐grading system without the “no test” option.