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Endowments, expectations, and the value of food safety certification: experimental evidence from fish markets in Nigeria

Author

Listed:
  • Kelvin Mashisia Shikuku

    (International Livestock Research Institute (ILRI))

  • Erwin Bulte

    (Wageningen University)

  • Carl Johan Lagerkvist

    (Swedish University of Agricultural Sciences)

  • Nhuong Tran

    (WorldFish, c/o: Department of Fisheries)

Abstract

We study the impact of endowments and expectations on reference point formation and measure the value of food safety certification in the context of fish trading on real markets in Nigeria. In our field experiment, consumers can trade a known food item for a novel food item that is superior in terms of food safety––or vice versa. Endowments matter for reference point formation, but we also document a reverse endowment effect for a subsample of respondents. The effect of expectations about future ownership is weak and mixed. While expectations seem to affect bidding behavior for subjects “trading up” to obtain the certified food product (a marginally significant effect), it does not affect bids for subjects “trading down” to give up this novel food item. Finally, willingness to pay for safety certified food is large for our respondents—our estimate of the premium is bounded between 37 and 53% of the price of conventional, uncertified food.

Suggested Citation

  • Kelvin Mashisia Shikuku & Erwin Bulte & Carl Johan Lagerkvist & Nhuong Tran, 2023. "Endowments, expectations, and the value of food safety certification: experimental evidence from fish markets in Nigeria," Experimental Economics, Springer;Economic Science Association, vol. 26(5), pages 1060-1084, November.
    • Handle: RePEc:kap:expeco:v:26:y:2023:i:5:d:10.1007_s10683-023-09809-7
    DOI: 10.1007/s10683-023-09809-7
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    References listed on IDEAS

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    More about this item

    Keywords

    Reference-dependent utility; Reverse endowment effect; Economic valuation; Food safety; Asymmetric valuation; Loss aversion;
    All these keywords.

    JEL classification:

    • C57 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Econometrics of Games and Auctions
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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