Willingness to pay for credence attributes associated with agri‐food products—Evidence from Canada

Abstract

Credence attributes such as environmental impact, origin, fairness/unfairness, and food safety/health are not available with certainty prior to or at the time of the consumer purchase decision. This creates a problem of imperfect or asymmetric information, leading to suboptimal supply and demand for products with these desirable attributes. Using a representative sample of 2001 Canadian consumers, we adopt, within an attribute‐based decision‐making framework, the asymptotically efficient double‐bounded stated preference approach, to estimate Canadian consumers' willingness to pay for origin, fairness, environmental impact, and food safety attributes associated with pork chops and fresh apples. We find that, on average, consumers are willing to pay significantly more for pork chops and fresh apples that are farmers‐advantaged, sourced from their own province, grown or raised under a production system designed to be environmentally sustainable, and chemical‐free. However, these findings differ significantly by the province of origin, gender, age, and income of the respondents, as well as by product type and attributes being valued.