Abstract
Although interest in sustainable food has increased substantially in recent years, the actual demand for such products has often risen quite unevenly across people. Making sense of the variable pace of behavioral change thus requires us to explore the foundations of sustainable consumption more closely, especially the importance assigned to specific attributes and the types of tradeoffs that prevail. Accordingly, this study utilizes a type of discrete choice experiment (DCE) to explore the influence of retail formats on decision-making processes. Stated-preference methods such as DCEs have proven useful to explain how and why individual willingness to pay (WTP) for qualities such as organic, fair trade, and locality can differ. By mostly focusing on product qualities, however, the importance of the retail format where products are purchased, and their impact on the valuation of attributes, is left unexplored. Framing this DCE in relation to tomato consumption, we find that type of retail format is a significant determinant of purchasing behavior, both on its own and via its interaction with the other qualities.
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Notes
- 1.
One limitation of this approach is that it is unable to account for interaction effects between attributes. We turn our attention to this in the following section.
- 2.
The choice-driven nature of DCEs is one of their primary advantages, i.e. due to greater correspondence with real-world decision-making. In this vein, a contrast with experimental auctions is useful, especially given the potential for preference reversals when engaging in bidding rather than choice (Lichtenstein and Slovic 1971; Slovic and Lichtenstein 1983). As bidding is motivated by winning, it is not analogous to choice and can therefore lead to distinct outcomes.
- 3.
Interestingly, some studies fail to recognize their method as a DCE. On this point, Louviere et al. (2010) argue that DCEs, in contrast to other multi-attribute valuation methods, are marked by their specific behavioral theoretical foundation (i.e. random utility theory) and superior flexibility and (external) validity for the modeling of decision-making processes.
- 4.
Two distinct rows for the price attribute are needed to ensure that no two products in a choice task are completely identical. This modification is required by the introduction of an individual-specified status quo.
- 5.
Usage of labels is eschewed in favor of the phrases ‘organic’ and ‘fair’ in the experiment. Labels are avoided in view of a tendency for value to be placed on the logo, irrespective of its link to quality (Lotz et al. 2013). For instance, Janssen and Hamm (2012) observe that a ‘fake’ logo in Switzerland was assigned higher WTP than generic organic labeling. Our interest in underlying processes of decision-making therefore justifies this approach.
- 6.
The corresponding German translation of ‘independent organic retailer’ is the more familiar ‘Biomarkt’. Hereafter, the shorter form of ‘organic retailer’ is thus used with no intended change in meaning.
- 7.
Full results for the individual-specified status quo are available upon request.
- 8.
This approach is operationalized in Stata via the mixlogit command.
- 9.
Although generally advisable (Hoyos 2010), a constant term is not included as this term became insignificant once the random effects were included. Further, the use of effects coding for the categorical independent variables limits the potential for correlation with the intercept, even if interactions are included (ibid.).
- 10.
We are thankful to an anonymous reviewer for raising this possibility.
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Acknowledgments
Chad M. Baum and Robert Weigelt are grateful for the support of Federal Programme “ProExzellenz” of the Free State of Thuringia. We would like to thank Anna-Lena Brede for outstanding research assistance and Dr. Thomas Baumann for graciously lending both his technical expertise and valuable time throughout the process, and to an anonymous reviewer for their helpful comments. In addition, our special thanks go to Sophia Buchner for copy-editing the document and helping prepare the tables. Finally, we wish to give thanks for the many thought-provoking comments from participants at the 2014 International Conference on Applied Psychology in Paris, as well as Andreas Chai and Ulrich Witt for their insightful input. Any errors are ours alone. We are unaware of any conflicts of interest that have influenced the study in any way.
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Baum, C.M., Weigelt, R. (2019). How Where I Shop Influences What I Buy: The Importance of the Retail Format in Sustainable Tomato Consumption. In: Chai, A., Baum, C. (eds) Demand, Complexity, and Long-Run Economic Evolution. Economic Complexity and Evolution. Springer, Cham. https://doi.org/10.1007/978-3-030-02423-9_8
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