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Comparing the willingness to pay through three elicitation mechanisms: An experimental evidence for organic egg product

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  • Ozge Dinc‐Cavlak
  • Ozlem Ozdemir

Abstract

This study is the first attempt to elicit individual willingness to pay (WTP) for varying attributes of a specific food product, the organic egg, using three elicitation methods, namely, a real choice experiment (RCE), the Becker–DeGroot–Marschak (BDM) mechanism, and a RCE by using the BDM mechanism (RCE‐BDM). The experimental setting allows for a comparison of these three methods. The mixed logit models in WTP space for the choice data and the random‐effects Tobit model for the BDM data are used for the analyses. The results show that the individuals' WTP varies across elicitation methods. More specifically, the WTP of the RCE is lower than the WTP of the BDM experiment, and mixed results have been found while comparing the WTP of the RCE‐BDM experiment and WTP of the BDM experiment. Lastly, individuals are willing to pay a premium for health, environment‐friendly, and animal welfare attributes for all three elicitation methods: the health attribute's premium having the highest value followed by those of animal welfare and environment‐ friendliness. The results have not changed with information treatment indicating robustness of the findings. [EconLit Citations: C91, C35, D12].

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  • Ozge Dinc‐Cavlak & Ozlem Ozdemir, 2021. "Comparing the willingness to pay through three elicitation mechanisms: An experimental evidence for organic egg product," Agribusiness, John Wiley & Sons, Ltd., vol. 37(4), pages 782-803, October.
    • Handle: RePEc:wly:agribz:v:37:y:2021:i:4:p:782-803
    DOI: 10.1002/agr.21702
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    2. Maximilian Spath, 2023. "The qualitative accuracy of the Becker-DeGroot-Marshak method," Papers 2302.04055, arXiv.org.

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