Organic label as an identifier of environmentally related quality: A consumer choice experiment on beef in Italy

Abstract

This paper uses a hypothetical choice experiment to investigate Italian consumer preferences and willingness-to-pay (WTP) for organic, conventional and genetically modified (GM)-fed beef, utilizing intrinsic, search cues (price, color and visible fat) and extrinsic, credence cues. Data are gathered from three different locations in northern, central and southern Italy using a sequential Bayesian approach. Results showed that consumers attach higher value to organic meat. WTP for GM-fed beef, which is not yet sold in Italy, is well below current conventional beef prices. Organic beef is attractive to consumers because it is associated with higher animal welfare standards and environment-related issues (food miles and biodiversity preservation). No differences are found in marginal WTP estimates by gender, age, education, being a parent or having a higher level of knowledge about organic production. Ethical/environmental issues (credence cues) appear to be more relevant in explaining variation in WTP for organic beef than ordinary product characteristics (search cues).