IDEAS home Printed from https://ideas.repec.org/a/ags/ijfaec/208846.html
   My bibliography  Save this article

Compensation Fees And Willingness To Pay: A Field Experiment On Organic Apples

Author

Listed:
  • Skuza, Nathan
  • McCracken, Vicki
  • Ellis, Joan

Abstract

An increasing number of studies suggest that compensation fees for participating in valuation studies can influence participant’s responses. This study investigates the impact that compensation has on individuals’ responses in a point -of-purchase setting, when the opportunity costs of participation are relatively small and participants are familiar with the products. We conducted a field experiment using the incentive compatible Becker-DegrootMarschak (BDM) mechanism to elicit consumers’ willingness-to-pay values for organically produced apples. Our results suggest that despite receiving similar information, compensated individuals tended to offer willingness-to-pay values that were significantly larger on average than those values offered by non- compensated individuals

Suggested Citation

  • Skuza, Nathan & McCracken, Vicki & Ellis, Joan, 2015. "Compensation Fees And Willingness To Pay: A Field Experiment On Organic Apples," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3(3), pages 1-13, July.
    • Handle: RePEc:ags:ijfaec:208846
    DOI: 10.22004/ag.econ.208846
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/208846/files/vol3.no3.pp1.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.208846?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Noussair, Charles & Robin, Stephane & Ruffieux, Bernard, 2004. "Revealing consumers' willingness-to-pay: A comparison of the BDM mechanism and the Vickrey auction," Journal of Economic Psychology, Elsevier, vol. 25(6), pages 725-741, December.
    2. Yue, Chengyan & Alfnes, Frode & Jensen, Helen H., 2009. "Discounting Spotted Apples: Investigating Consumers' Willingness to Accept Cosmetic Damage in an Organic Product," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 41(1), pages 29-46, April.
    3. Lusk, Jayson L. & Fox, John A., 2003. "Value elicitation in retail and laboratory environments," Economics Letters, Elsevier, vol. 79(1), pages 27-34, April.
    4. Jayson L. Lusk & Darren Hudson, 2004. "Willingness-to-Pay Estimates and Their Relevance to Agribusiness Decision Making," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(2), pages 152-169.
    5. Maria L. Loureiro & Wendy J. Umberger & Susan Hine, 2003. "Testing the initial endowment effect in experimental auctions," Applied Economics Letters, Taylor & Francis Journals, vol. 10(5), pages 271-275, April.
    6. Jayson L. Lusk & John A. Fox & Ted C. Schroeder & James Mintert & Mohammad Koohmaraie, 2001. "In-Store Valuation of Steak Tenderness," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 539-550.
    7. E. Elisabet RutstrÃm, 1998. "Home-grown values and incentive compatible auction design," International Journal of Game Theory, Springer;Game Theory Society, vol. 27(3), pages 427-441.
    8. James Murphy & P. Allen & Thomas Stevens & Darryl Weatherhead, 2005. "A Meta-analysis of Hypothetical Bias in Stated Preference Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(3), pages 313-325, March.
    9. John A. List (ed.), 2006. "Using Experimental Methods in Environmental and Resource Economics," Books, Edward Elgar Publishing, number 4180.
    10. Jay R. Corrigan & Matthew C. Rousu, 2006. "The Effect of Initial Endowments in Experimental Auctions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(2), pages 448-457.
    11. John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
    12. Corrigan, Jay R. & Rousu, Matthew C., 2008. "Testing Whether Field Auction Experiments Are Demand Revealing in Practice," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(2).
    13. repec:feb:framed:0078 is not listed on IDEAS
    14. repec:ebl:ecbull:v:3:y:2004:i:6:p:1-13 is not listed on IDEAS
    15. Fredrik Carlsson & Haoran He & Peter Martinsson, 2013. "Easy come, easy go," Experimental Economics, Springer;Economic Science Association, vol. 16(2), pages 190-207, June.
    16. Yue, Chengyan & Alfnes, Frode & Jensen, Helen H., 2009. "Discounting Spotted Apples: Investigating Consumersï¾’ Willingness to Accept Cosmetic Damage in an Organic Product," Staff General Research Papers Archive 12693, Iowa State University, Department of Economics.
    17. repec:ken:wpaper:0804 is not listed on IDEAS
    18. Eve J. Froehlich & Jared G. Carlberg & Clement E. Ward, 2009. "Willingness‐to‐Pay for Fresh Brand Name Beef," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(1), pages 119-137, March.
    19. Lijia Shi & Lisa A. House & Zhifeng Gao, 2013. "Impact of Purchase Intentions on Full and Partial Bids in BDM Auctions: Willingness-to-pay for Organic and Local Blueberries," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(3), pages 707-718, September.
    20. Bernard, John C. & Bernard, Daria J., 2010. "Comparing Parts with the Whole: Willingness to Pay for Pesticide-Free, Non-GM, and Organic Potatoes and Sweet Corn," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(3), pages 1-19, December.
    21. John Fox & Jayson Lusk, 2003. "Value elicitation in laboratory and retail environments," Framed Field Experiments 00185, The Field Experiments Website.
    22. repec:ken:wpaper:0601 is not listed on IDEAS
    23. Lanier Nalley & Darren Hudson & Gregory Parkhurst, 2005. "The initial endowment effect in experimental auctions revisited: further evidence," Applied Economics Letters, Taylor & Francis Journals, vol. 12(1), pages 59-63.
    24. Joseph Little & Robert Berrens, 2004. "Explaining Disparities between Actual and Hypothetical Stated Values: Further Investigation Using Meta-Analysis," Economics Bulletin, AccessEcon, vol. 3(6), pages 1-13.
    25. Charles R. Plott & Kathryn Zeiler, 2005. "The Willingness to Pay–Willingness to Accept Gap, the "Endowment Effect," Subject Misconceptions, and Experimental Procedures for Eliciting Valuations," American Economic Review, American Economic Association, vol. 95(3), pages 530-545, June.
    26. Rousu Matthew C. & Corrigan Jay R., 2008. "Estimating the Welfare Loss to Consumers When Food Labels Do Not Adequately Inform: An Application to Fair Trade Certification," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 6(1), pages 1-26, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chege, C. & Sibiko, K. & Birachi, E. & Jager, M., 2018. "Are Base of Pyramid (BoP) Consumers Willing to Pay for Nutritious Foods? Evidence from Kenya and Uganda," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276021, International Association of Agricultural Economists.
    2. Senakpon, Kokoye, 2017. "Farmers’ Willingness To Pay For Soil Testing Service In Northern Haiti," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252804, Southern Agricultural Economics Association.
    3. Zhai, Qianqian & Kassas, Bachir & Zhao, Shuoli & Chen, Lijun & Chen, Chao, 2020. "Investigating Preference Inconsistencies in Incentive Structures that Account for House Money Effects," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304584, Agricultural and Applied Economics Association.
    4. A. Banerji & Shyamal Chowdhury & Hugo De Groote & J. V. Meenakshi & Joyce Haleegoah & Manfred Ewool, 2018. "Eliciting Willingness†to†Pay through Multiple Experimental Procedures: Evidence from Lab†in†the†Field in Rural Ghana," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(2), pages 231-254, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oparinde, Adewale & Banerji, Abhijit & Birol, Ekin & Perez, Salomon, 2016. "Identifying hypothetical bias in experimental auctions in field settings in developing countries," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246284, African Association of Agricultural Economists (AAAE).
    2. Zhai, Qianqian & Kassas, Bachir & Zhao, Shuoli & Chen, Lijun & Chen, Chao, 2020. "Investigating Preference Inconsistencies in Incentive Structures that Account for House Money Effects," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304584, Agricultural and Applied Economics Association.
    3. Jaqueline Garcia-Yi, 2014. "Market-Based Instruments for the Conservation of Underutilized Crops: In-Store Experimental Auction of Native Chili Products in Bolivia," Sustainability, MDPI, vol. 6(11), pages 1-19, November.
    4. Lijia Shi & Lisa A. House & Zhifeng Gao, 2013. "Impact of Purchase Intentions on Full and Partial Bids in BDM Auctions: Willingness-to-pay for Organic and Local Blueberries," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(3), pages 707-718, September.
    5. Karen E. Lewis & Carola Grebitus & Rodolfo M. Nayga Jr, 2016. "The Importance of taste in experimental auctions: consumers’ valuation of calorie and sweetener labeling of soft drinks," Agricultural Economics, International Association of Agricultural Economists, vol. 47(1), pages 47-57, January.
    6. Kyriaki Remoundou & Drichoutis Andreas & Phoebe Koundouri, 2010. "Warm glow in charitable auctions: Are the WEIRDos driving the results?," DEOS Working Papers 1028, Athens University of Economics and Business.
    7. Barlagne, Carla & Bazoche, Pascale & Thomas, Alban & Ozier-Lafontaine, Harry & Causeret, François & Blazy, Jean-Marc, 2015. "Promoting local foods in small island states: The role of information policies," Food Policy, Elsevier, vol. 57(C), pages 62-72.
    8. Bernard Ruffieux & Anne Rozan & Stéphane Robin, 2008. "Mesurer les préférences du consommateur pour orienter les décisions des pouvoirs publics : l'apport de la méthode expérimentale," Économie et Prévision, Programme National Persée, vol. 182(1), pages 113-127.
    9. Jayson L. Lusk & F. Bailey Norwood & J. Ross Pruitt, 2006. "Consumer Demand for a Ban on Antibiotic Drug Use in Pork Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 1015-1033.
    10. Bull, Charles & Courty, Pascal & Doyon, Maurice & Rondeau, Daniel, 2019. "Failure of the Becker–DeGroot–Marschak mechanism in inexperienced subjects: New tests of the game form misconception hypothesis," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 235-253.
    11. repec:ken:wpaper:0804 is not listed on IDEAS
    12. Lai, Yufeng & Yue, Chengyan, 2020. "Consumer Willingness to pay for Organic and Animal Welfare Product Attributes: Do Experimental Results Align with Market Data?," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304328, Agricultural and Applied Economics Association.
    13. A. Banerji & Shyamal Chowdhury & Hugo De Groote & J. V. Meenakshi & Joyce Haleegoah & Manfred Ewool, 2018. "Eliciting Willingness†to†Pay through Multiple Experimental Procedures: Evidence from Lab†in†the†Field in Rural Ghana," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(2), pages 231-254, June.
    14. Jayson L. Lusk & F. Bailey Norwood, 2009. "An Inferred Valuation Method," Land Economics, University of Wisconsin Press, vol. 85(3), pages 500-514.
    15. Shi, Lijia & House, Lisa & Gao, Zhifeng, 2012. "Consumers’ Willingness-to-pay for Organic and Local Blueberries: A Multi-store BDM Auction Controlling for Purchase Intentions," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124998, Agricultural and Applied Economics Association.
    16. Corrigan, Jay R. & Rousu, Matthew C., 2008. "Testing Whether Field Auction Experiments Are Demand Revealing in Practice," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(2).
    17. James Murphy & Thomas Stevens & Lava Yadav, 2010. "A Comparison of Induced Value and Home-Grown Value Experiments to Test for Hypothetical Bias in Contingent Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 47(1), pages 111-123, September.
    18. Sebastian Lehmann, 2014. "Toward an Understanding of the BDM: Predictive Validity, Gambling Effects, and Risk Attitude," FEMM Working Papers 150001, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    19. Dominique Ami & Frédéric Aprahamian & Olivier Chanel & Stéphane Luchini, 2011. "A Test of Cheap Talk in Different Hypothetical Contexts: The Case of Air Pollution," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(1), pages 111-130, September.
    20. Rousu, Matthew C. & Marette, Stéphan & Thrasher, James F. & Lusk, Jayson L., 2014. "The economic value to smokers of graphic warning labels on cigarettes: Evidence from combining market and experimental auction data," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 123-134.
    21. Robert J. Johnston & Kevin J. Boyle & Wiktor (Vic) Adamowicz & Jeff Bennett & Roy Brouwer & Trudy Ann Cameron & W. Michael Hanemann & Nick Hanley & Mandy Ryan & Riccardo Scarpa & Roger Tourangeau & Ch, 2017. "Contemporary Guidance for Stated Preference Studies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 319-405.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ijfaec:208846. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iiaaktr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.