Open AccessWillingness to pay estimates informing agribusiness decision making: a cautionary tale
Author(s) -
Courtney Bir,
Ann Cummins,
Nicole Olynk Widmar,
Christopher A. Wolf
Publication year - 2018
Publication title -
the international food and agribusiness management review
Language(s) - English
Resource type - Journals
eISSN - 1559-2448
pISSN - 1096-7508
DOI - 10.22434/ifamr2017.0115
Subject(s) - willingness to pay , agribusiness , economics , order (exchange) , product (mathematics) , marketing , econometrics , business , microeconomics , mathematics , agriculture , geography , geometry , archaeology , finance
Multiple methods to improve reliability of results when using willingness-to-pay (WTP) to evaluate consumer preferences have been developed. This study compared methods of accounting for attribute non-attendance (ANA) in WTP for food product attributes. Both inferred and stated ANA were studied and estimates of WTP for pork chop and bacon attributes were compared. A larger number of significant differences were found between stated or inferred ANA corrected models than between corrected and uncorrected models. Significant correlations between inferred and stated ANA were not present and WTP estimates from correcting for inferred ANA (IANA) or stated ANA were statistically different from one another. Exploring WTP estimates across ANA corrected models is imperative for improving models to provide insight into consumer preferences. These insights can be used in making production decisions in order to meet consumer demands and inconsistent results can lead to conflicting business decisions.