Consumers willingness to pay a premium for safe cabbages
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Date
2010
Journal Title
Journal ISSN
Volume Title
Publisher
Business Journal for Entrepreneurs
Abstract
Growing consciousness about the nature of water used in growing cabbages and the manner in which sellers treat and/or wash cabbages has led some consumers to demand safe cabbages. This study sought to measure and model consumer’s willingness to pay a premium for safe cabbages in six communities in Ghana. Findings indicate that 58.33 percent of the respondents are willing to pay about 76 percent more of the current price of a conventional cabbage as a premium for a safe cabbage. The binary Logit regression results also suggest that consumers who are concern about the nature of water used in growing cabbages, aware of the use of unwholesome water in growing cabbages, knows the source of water used in irrigating cabbages, works in the health sector and resides in a rich community is likely to pay a premium for safe cabbages. To identify key consumer characteristics that influence the payment of a high premium for safe cabbage, the Tobit regression model was used. The results revealed that high income earners, consumers who are concern about the nature of water used in growing cabbages, aware of the use of unwholesome water in growing cabbages, and resides in a rich community is likely to pay a high premium for safe cabbages. As such, marketing efforts should focus on reaching consumers who fit this profile. Further analysis shows that the mean premium price offered by consumers in the rich communities is greater than that offered by those in the poor communities at 1 percent significance level; hence distribution channels of safe cabbages are likely to emerge as a more successful avenue in the rich communities than the poor communities.
Description
Keywords
Willingness to Pay, Contingent Valuation Method, Safe cabbage, Wastewater Irrigation
Citation
Business Journal for Entrepreneurs (3): 18-41