The role of hedonic, externality and feasibility attributes in consumer demand for organic and local produce – the case of honey and apples
Jørgen Dejgård JensenInstitute of Food and Resource EconomicsUniversity of [email protected]
Morten Raun MørkbakDepartment of Business and EconomicsUniversity of Southern Denmark
Slide 2
Background
Policy efforts to sustain economic activity on family farms in rural areas
Development of markets for high value-added food products
Claims made about local food products:Local economic gains, e.g. employmentShort supply chains, better communication with consumers and
lower transaction costsReduced ’food miles’ and lower enviromental strains from
transport etc.
Slide 3
Objectives
Investigate the role of consumers’ values and perceptions of- Hedonic characteristics- Externality characteristics- Feasibility characteristics
as determinants for consumers’ demand for organic and/or locally produced foods
Slide 4
The study
Joint research KU-LIFE project: Department of Food Science & Institute of Food and Resource Economics
Project duration 2009-2012Funding by the Danish Ministry of Food, Agriculture and
Fisheries
Internet questionnaire survey conducted in 2010Sample of Danish adults aged 18-65 (Userneeds panel)20.017 respondents invited, 5.825 initiated, 3.211 respondents
completed
Sample fairly representative of the corresponding population, however with an overrepresentation of middle-aged and high-income respondents.
Slide 5
Questionnaire survey with focus on honey and apples
Stated buying behaviour regarding organic and locally produced foods
Perceived product attributes of organic and local honey and apples, respectively
Stated importance of various attributes (environment, animal welfare, geographic origin, healthiness, availability, price) in different food categories (meat products, dairy products, fruit/vegetable products)
Choice experiments, where respondents were asked to choose between alternative combinations of product attributes for honey or apples
Follow-up questions on choice experiments
Slide 6
Data: Stated buying behaviour
Honey Apples
Most often, I buy... Average Std.dev Average Std.dev
Organic 0,24 0,43 0,26 0,44
Conventional 0,38 0,49 0,59 0,49
Other 0,04 0,21 0,05 0,21
Don’t know/don’t buy 0,34 0,10
Local 0,14 0,34 0,06 0,23
Danish 0,43 0,49 0,54 0,50
Imported 0,06 0,23 0,15 0,36
Don’t know/don’t buy 0,37 0,25
Slide 7
Data: Stated product perception variables for honey and apples, respectively (5-point agreement scale)
Organic products are more environmentally friendly
Organic products are healthier
Organic products taste better
The are no pesticide residues in organic products
Organic products look more appealing
The quality is better in organic products
Organic products are easier to find in the shop
Organic products are cheaper
Locally produced goods are more environmentally friendly
Locally produced goods are healthier
Locally produced goods taste better
The quality is better in locally produced goods
Locally produced goods are more accessible
Locally produced goods are cheaper
Locally produced goods are produced in Denmark
Locally produced goods are produced in a certain area
Locally produced goods are produced in my area
Slide 8
Data: Stated importance of attitude variables: meat, dairy, fruit/vegetable products, respectively (5-point agreement scale)
It is important to me that the product is organic
It is important to me that I can see the origin
It is important to me that the product is produced abroad
It is important to me that the product is produced in Denmark
It is important to me that the product is produced in a certain local area
It is important to me that the product is produced in my local area
It is important to me that the product is easily accessible
It is important to me that the product is produced in an environmentally
friendly way
It is important to me that the product is produced with high animal welfare
It is important to me that the product is low-fat
It is important to me to know the date of production
It is important to me that the price is low
Slide 9
Methods - Two-stage statistical approach
Principal components analysis/Factor analysis:
To identify general dimensions (factors) in respondents’ stated product perception variables and stated importance of different characteristics
Multinomial logit modelling:
To examine the importance of the identified factors for respondents’ stated product choice in their buying behaviour regarding honey and apples, respectively
Slide 10
Factor analysis - results
10 factors identified – 2 types of factors
Knowledge/perception factors
KQualOrg: Organic products perceived to have higher quality (26%)KQualLoc: Local products perceived to have higher quality (11%)KAvailLoc: Local products perceived to have high availability (6%)KEnvOrg: Organic products perceived to have low pesticide residue
content (5%)KAvailOrg: Organic products perceived to be easily accessible (4%)KPriceOrg: Organic products perceived to have low price (3%)KEnvLoc: Local products perceived to be environmentally friendly
(3%)
Value factors
VExt: High emphasis on externality attributes of foods (6%)VGeo: High emphasis on geographical attributes of foods (3%)VAvail: High emphasis on availability attributes of foods (3%)
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Factor analysis – share of variation explained by the 10 most important factors
Hedonic Externality Feasibility Total
Values (VGeo) (3%) VExt (6%) VAvail (3%) 12%
Knowledge/
Perception
KQualOrg
KQualLoc
(37%)
KEnvOrg
KEnvLoc
(8%)
KAvailLoc
KAvailOrg
KPriceOrg
(13%)
58%
Total 40% 14% 15%
Slide 12
Factor analysis - results
Only little overlap in the respondents’ perception of attributes in organic and local products, respectively
But some overlap with regard to externality attributes (environment, healthiness)
Respondents that put emphasis on externality attributes when buying foods tend to have more positive perception of organic as well as local products
Slide 13
Multinomial logit model results - honey
Organic Local Organic and local
Coeff. Sgn Coeff. Sgn Coeff. Sgn
Mean dep. 0,244 0,137 0,045
Intercept -1,5448 *** -2,3531 *** -3,4742 ***
Hedonic
KQualOrg 1,1060 *** -0,4249 ** 0,5375 **
KQualLoc -0,1961 0,6556 *** 0,6169 **
VGeo -0,1096 0,0896 0,4624 *
Externality
KEnvOrg 0,2298 * -0,3663 * -0,1185
KEnvLoc 0,2305 0,1203 0,2660
VExt 0,7980 *** 0,6725 *** 0,8939 ***
Feasibility
KAvailOrg -0,2390 * -0,2871 -0,4014 *
KPriceOrg -0,0825 0,0896 0,0318
KAvailLoc -0,4257 *** 0,7879 *** 0,1146
VAvail -0,7202 *** -0,5564 *** -0,4722 **
Slide 14
Multinomial logit model results – apples
Organic Local Organic and local
Coeff. Sgn Coeff. Sgn Coeff. Sgn
Mean dep. 0,260 0,057 0,025
Intercept -1,5213 *** -3,6486 *** -4,5790 ***
Hedonic
KQualOrg 1,5125 *** -0,5283 * 0,9363 ***
KQualLoc -0,1011 0,4691 * 0,3606
VGeo -0,2126 * 0,0775 0,6680 **
Externality
KEnvOrg 0,0370 -0,0027 -0,1900
KEnvLoc 0,1234 ** 0,1219 0,6740
VExt 1,0160 *** 0,8101 *** 0,9808 ***
Feasibility
KAvailOrg -0,5223 *** -0,1184 -0,6645 **
KPriceOrg 0,2066 -0,0557 0,1774
KAvailLoc -0,2957 ** 0,8534 *** 0,4367
VAvail -1,0276 *** -0,4467 -0,6731 **
Slide 15
Conclusions
Respondents’ concern for externalities tends to stimulate the choice of both organic and local products
Concern for product availability tends to be a barrier for the choice of organic as well as local products.
There is only limited overlap in respondents’ perception of hedonic quality in organic and local products, respectively. So the hedonic attributes of these product categories will tend to appeal to different segments of consumers.
Perceived price differential for organic products does not seem to influence respondents propensity to choose organic or local product varieties
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Discussion
Study finds many similarities between honey and apples – to what extent does questionnaire design (e.g. sequence of questions) affect these similarities?
Study builds on stated purchasing behaviour variables – but to what extent does this reflect real purchasing behaviour?
Study uses honey and apples as cases – to what extent can findings from these two product categories be generalised to other food categories?
Slide 17
Thanks for your attention
