Is consumers' willingness to pay premium for agricultural brand labels sustainable?: evidence from Chinese consumers' random n-price auction experiment

Le Bo (College of Economics and Management, Shenyang Agricultural University, Shenyang, China)
Xiaoli Yang (College of Economics and Management, Shenyang Agricultural University, Shenyang, China)

British Food Journal

ISSN: 0007-070X

Article publication date: 30 June 2022

Issue publication date: 19 December 2022

1706

Abstract

Purpose

Consumers' willingness to pay premium (WTPP) for two different types of agricultural brand labels (enterprise and regional), are evaluated through a non-hypothetical Random n-price auction experiment during the online purchase of fresh agricultural products. The purpose of this paper is to evaluate the two WTPP, compare their differences, and explore their sustainability.

Design/methodology/approach

Data were collected in July–August 2020 from a sample of 310 consumers in Liaoning Province, China. A nonhypothetical random n-price auction experiment was implemented in a simulated online shopping environment.

Findings

The results show that WTPP exists, and WTPP level of regional brand labels is higher than that of enterprise brand labels. Consumers' WTPP is sustainable. Consumers with low WTPP for enterprise brand labels and consumers with high WTPP for regional brand labels have stronger willingness to repurchase.

Practical implications

The results have direct practical implications for developing brand agriculture and encouraging “brand consumption”. The results can provide theoretical reference for policymakers, enlightenment for the development and effective dissemination of agricultural brand labels and important information to e-retailers on how to sale agricultural products with agricultural brand labels.

Originality/value

To the best of the authors' knowledge, no previous study has related WTPP and its sustainability for agricultural brand labels in China. We try to fill a gap in literature on consumers' WTPP for agricultural brand labels. And the authors explore the sustainability of WTPP by analyzing the impact of WTPP on repurchase intention and recommendation intention respectively.

Keywords

Citation

Bo, L. and Yang, X. (2022), "Is consumers' willingness to pay premium for agricultural brand labels sustainable?: evidence from Chinese consumers' random n-price auction experiment", British Food Journal, Vol. 124 No. 13, pp. 359-374. https://doi.org/10.1108/BFJ-01-2022-0077

Publisher

:

Emerald Publishing Limited

Copyright © 2022, Le Bo and Xiaoli Yang

License

Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode


1. Introduction

China's Ministry of agriculture and rural areas has determined 2017 as the “year of agricultural brand promotion”, and the construction of agricultural brand has risen to the national strategy. Developing brand agriculture and changing agricultural growth mode is an important task to accelerate agricultural modernization (Yin et al., 2019). The construction of agricultural brand label is the key to the construction of agricultural brand, because it cannot only protect farmers and agricultural products in law, but also conducive to the dissemination of agricultural brand and the accumulation of agricultural brand value (Jiang et al., 2019). Agricultural brand labels include enterprise brand labels and regional brand labels based on geographical indications of agricultural products (Loureiro and McCluskey, 2010; Skuza et al., 2015). Agricultural brand labels are different from industrial products in intellectual property protection and face multiple difficulties (Leufkens, 2018). The main reason is that agricultural products are unique and produced by farmers. The construction of brand labels involves multiple subjects of government, enterprises and farmers and the key is uncertain income (Zhong and Chen, 2019). Then, whether public policy and public finance can play a role in the construction of agricultural brand labels is a practical problem worthy of study.

The investment of the government and enterprises in the construction of agricultural brand labels requires consumers to pay a premium. Agricultural brand labels have symbolic value of quality and are the most direct and effective carrier of the relationship between brands and consumers. Especially in the environment of the rapid development of the Internet and e-commerce platforms, they are an effective means for consumers to alleviate information asymmetry, quickly identify and buy high-quality agricultural products (Chang et al., 2021). Consumers' willingness to pay premium (WTPP) for the brand label refers to the amount they are willing to pay more for the brand label attribute (Hanemann, 1991), which is a key indicator reflecting the brand status and importance in the eyes of consumers (Kadirov, 2015; Van et al., 2021).

There are mature theoretical models and research methods in the existing research on consumer WTPP (Loureiro and McCluskey, 2010). Experimental auctions (EA) are largely used to measure consumers' willingness to pay (WTP) in a nonhypothetical scenario, with participants facing real economic incentives to disclose their real preferences (Corrigan and Rousu, 2006; Lusk et al., 2007). Lusk et al. (2004) demonstrated the usefulness of EA as a valuable tool to support policymakers in their marketing decisions, whether in public institutions or enterprise.

The rapid development of China's fresh e-commerce and the improvement of logistics insurance industry make it a trend for consumers to buy fresh agricultural products online, but there are relatively few studies on consumers' WTPP for agricultural brand labels online (Baker et al., 2019; Cang and Wang, 2020). Therefore, in the online shopping environment, the impact of consumers' WTPP for different types of brand labels of fresh agricultural products has important theoretical significance and practical reference value (Boyle et al., 2021).

This study attempts to answer the following questions: Can the government and enterprises' investment in agricultural brand labels of agricultural products bring consumers to pay a premium for agricultural brand labels? Which is the higher level of WTPP of enterprise brand label or regional brand label? Are the WTPP sustainable? Based on the above analysis, this paper constructed the experimental scenario of “Consumers purchase fresh products online”, used the random n-price auction experiment to measure consumers' WTPP for different types of brand labels, and compared the differences of consumers' WTPP. This paper explored the impact of consumers' WTPP on sustainability by analyzing the impact of WTPP on repurchase and recommendation intention.

2. Literature review and hypothesis presentation

2.1 Agricultural brand labels and WTPP

Previous research results show that consumers are willing to pay for food labels (Liu et al., 2013). Food labels include eco-labels, GM food labels, brand labels, US state agricultural-product labels and European Protected Geographical Indication labels, BSE-tested-beef labels and “Fair Trade” labels. McCluskey and Loureiro (2003) found that consumers must perceive high quality in order for the food product to command a premium. From the existing research, consumers are willing to pay premium for agricultural brand labels (Wongprawmas and Canavari, 2017; Yin et al., 2019).

Referring to the definition of food label (Yu et al., 2014), the brand label of fresh products is defined as the identification name and symbol of fresh agricultural products that can fully express and convey the advantages of products and have differences based on the humanistic and natural conditions of an enterprise or region, such as Chinese Chu orange, Luochuan apple, etc.

Based on the search, experience and credence (SEC) framework, consumers are willing to pay a premium for fresh agricultural products with agricultural brand labels (Girard and Dion, 2010). The SEC-product classification framework has been evolved by Nelson (1970). In the online shopping information environment, the brand label of fresh agricultural products has three attributes: search products, experience products and credence products. The three attributes affect WTPP in different online shopping stages (Girard and Dion, 2010). Firstly, from the perspective of search products attributes, the brand label belongs to external clues. In the online shopping information collection stage, consumers identify the target fresh products through the names and symbols in the brand label, infer their quality, meet the purchase expectation, and generate the WTPP (Ozdemir et al., 2020). Secondly, from the perspective of experience products attributes, in the evaluation stage of online shopping scheme, consumers compare fresh agricultural products with or without brands and different types of brand labels. Brand cognition, brand label identification and its implied culture affect consumers' brand attitude, resulting in WTPP (Nelson, 1970). Finally, from the perspective credence products attributes, in the online shopping decision-making stage, the brand label is the embodiment of high quality, which can reduce consumers' online shopping risk perception, alleviate consumers' information asymmetry from the psychological level, improve consumers' trust and then make consumers have WTPP (Axelsson, 2008). Accordingly, from this reasoning, the following is hypothesized:

H1.

Consumers are willing to pay premium for agricultural brand labels.

Consumers have different WTPP for different types of agricultural brand labels. First, regional brand labels have policy and fiscal advantages. China's agricultural brand is divided into three categories: regional brand, enterprise brand and product brand. The latter two belong to a definite and unique body. The predecessor of regional brand label is geographical indication. Regional brand is an important brand type, and is mainly cultivated. Governments at all levels use regional brands to drive local industrial transformation and upgrading, and continue to drive regional economic growth and farmers' income. Regional brand has advantages in policy environment and fiscal support, and can stimulate consumers' national feelings and origin complex (Yan, 2017). Secondly, regional brand labels have the advantage of natural resource endowment. Regional brands have unique natural resource advantages and humanistic geographical characteristics, pointing to products and services under specific political and geographical frameworks. Industrial clusters and government leadership make regional brands gather more natural resources than enterprise brands (Allen, 2007). Based on the resource dependence theory, regional brand development has more performance and regional brand label is the objective embodiment of resource integration and competitive advantage. Finally, regional brand labels have the advantages of management and service. Regional brand owners invest more and have a wider range of influence in brand management and control, service guidance and marketing promotion (Midmore et al., 2006). Therefore, consumers perceive greater value of regional brand labels and higher WTPP. Accordingly, from this reasoning, the following is hypothesized:

H1a.

Consumers' WTPP for regional brand labels is higher than that of enterprise brand labels.

2.2 Sustainability of WTPP (SWTPP)

It has been found in the literature that consumers' WTPP is sustainable (Jiang et al., 2019; Van et al., 2021). Sustainability refers to consumers' willingness to repurchase or recommend others to buy fresh agricultural products with the same brand label in the future after participating in brand activities, which is the embodiment of continuing to pay premium for brand labels.

On the one hand, analysis based on Stimulus-Organism-Response (SOR) theory. Mehrabian and Russell (1974) first proposed the SOR model in the field of environmental psychology, which shows that external environmental stimuli can affect the internal state of individuals and further affect individuals' response. With the rapid development of e-commerce, some scholars began to explain the impact of the stimulating factors on consumers' online shopping decisions through SOR theory (Kawaf and Tagg, 2012; Peng and Kim, 2014). Referring to SOR theory, external stimulation will cause changes in consumers' body and then affect consumers' behavior. Consumers obtain brand label information through brand activities. Brand label information will leave a mark in consumers' hearts. In the face of the stimulation of the same brand label, consumers will have a positive brand attitude, which will lead to repeated online shopping intention (Kadirov, 2015).

On the other hand, analysis based on the psychological ownership theory. Psychological ownership refers to the feelings of possessiveness toward objects, material or nonmaterial, in an expression of “mine” (Pierce et al., 2001). The feeling that a product is “mine” improves consumers' attitude toward the product, enhances attachment to the product and increases its perceived value (Dickert et al., 2018). Therefore, psychological ownership meets the motivation of consumers to express their identity to themselves and others (Belk, 1988), and can also predict their repurchase intention and recommendation intention to others in the online shopping environment (Harwood and Garry, 2010). Brand labels convey brand and fresh agricultural product information, which makes consumers feel familiar with them, and then produce psychological ownership. They are more willing to recommend familiar fresh agricultural products with good experience to others, and consumers are more likely to produce recommendation intention in the future (Schifferstein et al., 2019). Accordingly, from this reasoning, the following is hypothesized:

H2.

WTPP for brand label is sustainable.

The sustainable level of WTPP for different types of brand labels is different. Different types of brand labels make consumers have different brand experiences and brand attitudes, which ultimately have different effects on repurchase and recommendation willingness. The sustainable level of WTPP for regional brand labels is higher than that of enterprise brand labels. There are a large number of enterprise brand labels in reality, and there is substitution effect between them. Enterprises often carry out promotional activities such as discounts, which is easier to attract consumers who are more price sensitive (Hyman et al., 2010; Kopalle and Lindsey-Mullikin, 2003). Therefore, consumers with low WTPP are more willing to repurchase. Consumers are also more willing to recommend enterprise brand labels with price advantage, so consumers with low WTPP are more willing to recommend.Accordingly, from this reasoning, the following is hypothesized:

H2a.

WTPP for enterprise brand label has a significant negative impact on its sustainability.

However, due to the unique cultural and natural characteristics of regional brands, the number of alternative products is relatively small. Consumers with high WTPP for regional brand labels are more willing to repurchase in order to seek the unique attributes of regional brands, and consumers with high WTPP are willing to recommend products with regional characteristics to others, so consumers with high WTPP are more willing to recommend (Wu et al., 2016; Steenkamp et al., 2010). Therefore, the research hypothesis is put forward:

H2b.

WTPP for regional brand label has a significant positive impact on its sustainability.

The theoretical framework of this study is shown in Figure 1.

3. Method

WTPP is obtained through the method of experimental economics, and the auction experiment in the revealed preference method is used to collect consumers' WTPP for online shopping of different types of brand labels. Test the existence and sustainability of WTPP (test H1 ∼ H2).

3.1 Data collection

3.1.1 Selection of auction mechanism

Random n-price auction is selected as the auction mechanism of this research. The effectiveness of auction experiment depends on the choice of auction mechanism to a great extent. From the existing research, the auction experiment is mainly divided into three auction mechanisms: Vickrey, BDM and random n-price. The random n-price auction mechanism meets the requirements of “incentive compatibility” and integrates the advantages of Vickrey and BDM auction mechanisms, which can accurately estimate consumer preferences (Shogren et al., 2001).

3.1.2 Experimental materials

Grapes were selected as the experimental object of the auction. The reasons are as follows: Firstly, fruit accounts for a large proportion of fresh products and has brand effect. It is a fresh product whose brand can be understood and accepted by consumers and represents its quality; Secondly, grape is the fruit with the highest online shopping frequency, online shopping sales volume, sales volume and popularity among consumers; Finally, grapes have three mature online sales states (Figure 2). Taking Jasmine grape as the experimental product that is suitable for online retail, and has been highly accepted by the public in recent years. The stimulating materials displayed to consumers are two pictures, the control group is two ordinary grape photos and the experimental group is one grape photo and one brand label photo.

3.1.3 Recruitment of experimental subjects

The experimental area was Shenyang, Liaoning Province, China. Fresh agricultural products have a certain transportation radius, which corresponds to that the communication effect of brand labels is the most effective within a certain radius, so the province where the experimental products are located is selected. As the provincial capital city, Shenyang has a large population and a high level of economic development, which can meet the requirements of scientific sample sampling and consumers' online shopping experience.

The sampling method is quota sampling. Firstly, the house price income ratio is introduced to convert the house price into personal monthly income; Secondly, according to the monthly income distribution of Chinese fresh online shopping users, see formulas (1) and (2), residential areas are randomly selected from each income level; finally, consumers are selected according to the principle of convenience. The per capita housing area in Shenyang is 29.29 square meters, and the house price income ratio in Shenyang in 2017 was 6.3. The personal monthly income distribution data comes from the consumption insight report of China's fresh e-commerce industry in 2018.

(1)Housepriceincomeratio=TotalhousingpriceTotalannualhouseholdincome=Percapitahousearea×Averagehouseholdpopulation×HousesalesunitpriceAveragehouseholdpopulation×Percapitaannualincome
(2)Housesalesunitprice=Housepriceincomeratio×Percapitamonthlyincome×12Percapitahousearea=6.3×12×Percapitamonthlyincome29.29=2.58×Percapitamonthlyincome

The recruitment method is online and offline. The organizer of the experiment invited consumers aged 18 and above who had online shopping experience. The organizer of the experiment invited consumers who came into their sight at random to participate in the experiment. If the consumer refuses to participate in the experiment, the organizer of the experiment will continue to invite the next consumer. This practice can improve the randomness of respondents (Wu, 2018). From June 15, 2020, over a period of 45 days, 14 residential districts were selected and 320 consumers were invited to participate in the auction experiment. Due to time changes or failure to pass the pre-experiment, the final effective sample was 310 (Table 1).

3.1.4 Experimental procedure

Pre experiment: Select mineral water as the subject matter, and make consumers (called participants in the experiment, the same below) familiar with the auction rules through pre-experiment.

Formal experiment: Step 1: The participants take their seats according to their ID number, confirm that the post it notes, questionnaires and other props used to write the quotation are complete, and inform each other that communication is prohibited. The initial endowment of each participant is 15 CNY and 1 kg of ordinary grapes (promise to mail to the address designated by the consumer). Step 2: Introduce the varieties of the experimental subject matter, cold chain expresses and other information and explain to the participants that the price of ordinary grapes is 15 CNY/kg, which is convenient for reference when the participants quote. Step 3: First, conduct random n price auction for enterprise brand label grapes. Show the pictures of ordinary and enterprise brand labels, and the participants make a sealed quotation. The quotation represents the highest price difference willing to pay for 1 kg ordinary grapes in exchange for 1 kg enterprise brand label grapes. After the quotation, the experimental organizer collects and sorts all the quotations, and randomly selects the nth highest quotation as the transaction price of this round. The participant whose quotation exceeds the transaction price is the winner of the auction. The ID number of the winner and the corresponding quotation are published. The quotation can be 0, but cannot be negative. Step 4: Follow the same procedure as the enterprise brand label grape auction, and auction the regional brand label grapes. After the two rounds, those who fail to succeed in the auction do not need to pay. Those who succeed in the first round pay the transaction price of the round. Those who succeed in the second round randomly draw rounds in the form of cards and pay the corresponding transaction price. The experimental organizer will mail ordinary grapes or grapes with corresponding brand labels for them. After the auction, participants fill out a questionnaire.

3.2 Model setting

3.2.1 Ordered Logit model

Since consumers repurchase intention and recommendation intention belong to ordered variables, Ordered Logit model is selected for analysis (Williams, 2010). We constructed SWTPP model of the ith consumer. The dependent variable is the SWTPP of consumers on agricultural brand labels, the independent variable is WTPP. According to the existing research on the influencing factors of WTP, this study selects three types of control variables: brand awareness, consumption attitude and individual characteristics of consumers. As shown in Formula (3).

(3)Yijk=βjk+β1WTPPij+β2BLIi+β3BCIi+β4RPi+β5Trusti+β6Agei+β7Incomei+β8Educationi+β9Childreni+β10Oldi+β11Habiti+β12Experiencei+εjk

Among them, Yijk represents the class k sustainability level of the ith consumer on the jth brand label wtpp. j = 1 and j = 2 represent enterprise and regional brand label respectively. k = 1 and k = 2 represent repurchase and recommendation, respectively. βjk represents a constant term. ɛjk represents the random error term.

3.2.2 Bivariate probit model

Repurchase intention and recommendation intention are binary discrete variables, which are interrelated and affect each other. The interaction between the two produces four independent results. The four results include all possible combinations of consumers repurchase intention and recommendation intention. Therefore, according to the analysis of the influence of relevant factors on consumers repurchase and recommendation intention, the following bivariate probit model can be established (Poirier, 2012). See Formula (4) and (5).

(4)yij=γ0+γ1WTPPij+γ2Xij+μij={RPIij=γ0+γ1WTPPij+γ2Xij+μijRCIij=γ0+γ1WTPPij+γ2Xij+λijRPIij+μij,j=1,2

In Formula (4), γ represents the influence coefficient of repurchase intention (RPI) on recommendation intention (RCI), and meets the conditions γiN(μγ,δλ2) and (μ1ijμ2ij)N((00),(1ρρ1)). Other explanatory variables meet the exogenous hypothesis. See Formula (5) for the probability of occurrence when RPI = m and RCI = n.

(5)Pr(RPI=m,PCI=n)=Pr(j1(m-1)<RPI<j1m,j2(n-1)<RCI<j2n)

3.3 Variable definition

Variable measurement items are derived from mature scales in published academic papers. The measurement items of brand label identification, brand culture identification, risk perception and trust refer to the contents of Porral and Lang (2015), Gensler et al. (2013), Featherman and Pavlou (2003) and McKnight et al. (2002). We revised in combination with brand practical experience, and the method of “two-way translation” is used to ensure the content accuracy of measurement items. Before the formal experiment, in order to confirm the rationality of the content of the questionnaire, 10 experts, teachers and postgraduates from agricultural brands and consumer behavior were invited for pre-test. Optimize according to the feedback of pre-test, and finally determine the content of variable measurement items (Table 2).

4. Result

Firstly, descriptive statistical analysis is made on WTPP for two different types of brand labels; Secondly, in the empirical analysis, Tobit and OLS regression model is used to analyze the heterogeneity of WTPP and multiple Logit regression model is used to compare the WTPP for two brand labels of the same consumer; Finally, ordered logit regression and bivariate probit regression are used to analyze the SWTPP.

4.1 Descriptive statistics of WTPP

Table 3 reports the statistical results of consumers' WTPP for online shopping of two different types of brand labels. The average value of consumers' WTPP for online shopping of enterprise and regional brand labels is 9.532 CNY/kg and 13.303 CNY/kg, respectively, and the average value of the difference between regional brand labels and enterprise brand labels is 3.771 CNY/kg. The research hypothesis H1 is supported. The results verify the existence of WTPP, and the average WTPP for regional brand labels is higher than that of enterprise brand labels. H1a is supported.

4.2 Empirical analysis of SWTPP

Table 4 reports the estimation results of SWTPP for the ordered logit model. Model 1 and Model 2 report the sustainability regression results of WTPP for enterprise brand labels. Model 3 and Model 4 report the sustainability regression results of WTPP for regional brand labels.

In Model 1, the WTPP negatively affects consumers' willingness to repurchase enterprise brand labels, and through the 10% significance level test. The lower the WTPP for online shopping of enterprise brand labels, the stronger the consumers' willingness to repurchase, which may be due to the large number of agricultural products with enterprise brand labels, and there is a substitution effect between them, and consumers will consider cost minimization. When agricultural products with enterprise brand label are promoted or the price is low, consumers with low WTPP will have repurchase intention. In Model 3, the WTPP positively affects consumers' willingness to repurchase regional brand labels, and through the 10% significance level test. Consumers with higher online shopping premium of regional brand labels have stronger willingness to repurchase, indicating that the number of agricultural products with regional brand labels is relatively limited and the substitution effect is not obvious. When consumers consider the unique characteristics of regional brand labels, consumers with high WTPP will have repurchase intention. Therefore, the WTPP has a significant impact on their repurchase. Both positive and negative effects enhance the willingness of a certain type of consumers to repurchase products with brand labels. Therefore, the WTPP is sustainable.

In Model 2 and Model 4, the WTPP does not significantly affect consumers' willingness to recommend enterprise and regional brand labels. There may be reasons: First, consumers may still be cautious about recommending agricultural products to others. Second, agricultural products are relatively common agricultural products, and it is unlikely for consumers to recommend agricultural products to others whether the brand label is good or bad. Third, at present, consumers still mainly buy fresh agricultural products offline. Even if they buy online, there are a large number of agricultural products for the people around them to choose from on the online shopping platform, so they do not recommend them to others.

In terms of other variables, in the estimation results of the sustainability of premium payment willingness, trust has a positive impact on the repurchase intention and recommendation intention of the two brand labels, and through the significance level test of 1%, 5%, 10% and 10%, it shows that trust plays an important role in the SWTPP, and paying attention to consumers' trust is the key that cannot be ignored.

Table 5 reports the estimation results of SWTPP based on bivariate probit model. Model 5 and Model 6 are the estimation results of the SWTPP of enterprise and regional brand label, respectively. Wald test showed that the p-values of Model 5 and Model 6 were less than 0.01 and 0.05, respectively, so the bivariate probit model should be used. In model 5, the WTPP for enterprise brand label is negatively correlated with whether to repurchase, and it passed the 10% significance level test, which is positively correlated with whether to recommend. It has not passed the significance level test, and the results are consistent with the results of Model 1 and Model 2 in Table 4. In Model 6, the WTPP for regional brand labels is positively correlated with the willingness to repurchase, and it passed the 5% significance level test, which is positively correlated with whether to recommend or not. It has not passed the significance level test, and the results are consistent with the results of Model 3 and Model 4 in Table 4.

As for control variables, brand label identification variables are positively correlated with enterprise and regional brand repurchase intention and repurchase intention, and have passed the significance level test of 1%, 10%, 1% and 10%, respectively, indicating that the key role of brand label identification is obvious, eye-catching and easy to be recognized by consumers, which plays a key role in the SWTP. Consumer risk perception variables are negatively correlated with enterprise and regional brand repurchase intention and recommendation intention, but they have not passed the significance review test, indicating that in the sustainable stage of WTPP, consumers are not significantly affected by risk perception, while trust is positively correlated with enterprise and regional brand repurchase intention and recommendation intention, and they have passed 1% and 1% respectively The significance level test of 1% and 5% shows that the WTPP for enterprise brand label affects the willingness to recommend, which fails to pass the significance test, indicating that trust is an important factor affecting the sustainability of WTPP, which should be paid full attention to.

5. Discussions and conclusions

Agricultural products are produced by farmers, which has its particularity. Intellectual property protection is different from industrial products. It is difficult to protect intellectual property. Whether the government should invest in agricultural brand construction and establish agricultural brand labels through formulating public policies is a problem worthy of study. However, the government investment and the production of brand agricultural products require consumers to pay a premium for them, which is good for agricultural production and farmers, so the government investment is worth it. Therefore, it is of great value to study the impact of “brand labels” on consumers' WTPP and the sustainability of WTPP. This study will contribute to the design of agricultural brand labels and the implementation of relevant policies. This study simulates the online shopping environment, uses the random n-price auction experiment to measure consumers' WTPP for enterprise and regional brand labels, and empirically analyzes the SWTPP of two types of brand labels.

5.1 Key findings

The following conclusions can be drawn from the analysis. First, consumers are willing to pay a premium for enterprise brand label and regional brand label, which are 9.532 CNY/kg and 13.303 CNY/kg respectively. The WTPP for regional brand label is higher than that of enterprise brand label. This conclusion have confirmed the importance of agricultural brand labels. This conclusion is consistent with those of Yin et al. (2019) and Golan et al. (2001). No research has been found on the specific results of consumers' WTPP for agricultural brand labels. Thus, we compare consumers' WTPP for other food safety labels and find that consumers' WTPP for brand labels in the results of this study is higher than consumers' WTPP for organic agricultural products and in other research results. Probst et al. (2012) revealed that consumers were willing to pay a premium of 1.04 USD (per plate) if the food served contained only certified organic vegetables. Janssen and Hamm (2012) discussed consumer preference for different organic labels in six European countries and revealed that consumer WTPP for different labels varied greatly. Based on the above analysis, by further comparing the differences of consumers' WTPP for enterprise and regional brand labels, we discuss which type of brand labels consumers prefer. The result of this study is consistent with those of similar studies (Steenkamp et al., 2010; Kadirov, 2015).

Moreover, consumers' WTPP for agricultural brand labels is sustainable. Although WTPP did not significantly affect consumers' recommendation intention, WTPP significantly affected consumers' repurchase intention. Consumers with low WTPP for enterprise brand labels and consumers with high WTPP for regional brand labels have stronger willingness to repurchase. The two dimensions of SWTPP defined in this study are repurchase intention and recommendation intention. The reason is that consumers and others realize the sustainability of WTPP through continuous purchase. Consumers' repurchase intention and recommendation intention are two important indicators of customer loyalty in marketing (Dick and Basu, 1994). Consumers' willingness to repurchase agricultural brand WTPP should be the primary way to realize its sustainability, which is consistent with the existing research conclusions (Olaru et al., 2008; Kim et al., 2014). In this study, consumers' WTPP for different types of brand labels has a significant impact. Among them, trust is an important variable in the existing literature (Chiu et al., 2009; Antwi, 2021). The results of this study are also consistent with previous studies.

5.2 Theoretical contributions

Our work contributes to the existing literature in multiple ways. Firstly, it enriches the literature of agricultural brand labels. We use a real random auction experiment to measure consumers' WTPP for enterprise and regional brand labels. The results provide new evidence for the research of agricultural brand labels, and enrich the literature on the relationship between agricultural brands and consumers' online shopping behavior.

Additionally, we contribute to enrich the literature of consumers' WTP. Previous studies on consumers' WTP mostly used it as a dependent variable to analyze consumers' preferences or analyze its influencing factors (Díaz et al., 2012; Lewis et al., 2016; Boyle et al., 2021). This study uses the method of experimental economics to study the sustainability of the WTPP, and tries to explore the stability and durability of the WTPP, which provides a new possible perspective for the study of consumers' WTP.

Thirdly, we contribute to enrich the literature of consumers repurchase intention and recommendation intention. This study not only studies the impact of consumers' WTPP for a certain brand label on repurchase intention and recommendation intention, but also compares the impact of consumers' WTPP for two different types of brand labels on repurchase intention and recommendation intention. The results also confirm that there are significant differences in the impact of different types of brand labels.

5.3 Practical implications

The results have direct practical implications for developing brand agriculture and encouraging “brand consumption”. Firstly, the results can provide theoretical reference for policymakers. From the perspective of consumers, this study answers the question “whether the government should support agricultural brand construction and establish agricultural brand labels by making public policies and investment”?. At the same time, comparing the WTPP and SWTPP results of consumers on the two types of brand labels can provide a reference for the government, enterprises and farmers to choose enterprise or regional brand labels, or the coexistence of the two brand labels at the same time.

Secondly, it provides enlightenment for the development and effective dissemination of agricultural brand labels. When designing agricultural brand labels, designers should fully consider the characteristics of brand communication and design agricultural brand labels that are easy for consumers to identify and contain agricultural characteristic cultural information.

Finally, it provides important information to e-retailers on how to sale agricultural products with agricultural brand labels. When selling branded agricultural products online, they should consider the psychological factors of consumers, reduce consumers' risk perception, enhance consumers' trust and realize the sustainability of WTPP.

5.4 Limitations and further studies

There are still some limitations in the study. Due to the relatively complex auction experimental process and the obvious seasonal characteristics of the experimental objects, the final sample number of random n-price auction experiment is limited. Further research can supplement the experimental data of other fresh agricultural products or similar brand labels with the same type of brand labels in different regions, so as to make the research results more robust.

Furthermore, we only studied consumers' WTPP for brand labels of fresh agricultural products and analyzed the impact of WTPP on sustainability. However, our research is insufficient to explore the impact path. This limitation is also proposed as a future line of research. Further research can study the intervention means to improve consumers' WTPP and SWTPP, and explore the impact path.

Figures

Theoretical framework

Figure 1

Theoretical framework

Brand label display in the experiment

Figure 2

Brand label display in the experiment

Descriptive statistics of the sample

CharacteristicsClassificationFrequency (%)
GenderFemale215 (69.35)
Male95 (30.65)
Age (year)Under 2551 (16.45)
26–35102 (32.90)
36–4559 (19.03)
46–5534 (10.97)
Over 5664 (20.65)
EducationBelow college38 (12.26)
College53 (17.10)
University156 (50.32)
Graduate63 (20.32)
Income (CNY)0–3,000101 (32.58)
3,001–5,000112 (36.13)
5,001–8,00065 (20.97)
8,001–10,00016 (5.16)
10,001 and more16 (5.16)
ChildrenNo142 (45.81)
Yes168 (54.19)
OldNo188 (60.65)
Yes122 (39.35)
HabitPromotion100 (32.26)
Normal demand100 (32.26)
Superior quality110 (35.48)
ExperienceNo158 (50.97)
Yes152 (49.03)

Note(s): Income refers to personal monthly disposable income. Children refer to those under the age of 18. Old refer to those over 60 years old. Experience refers to online shopping of fresh agricultural products

Descriptive statistics of the variables

Latent variablesObserved variablesMeanSD
SWTPPEnterprise brand label repurchase intention (Y1)4.7102.087
Enterprise brand label recommendation intention (Y2)3.9522.390
Regional brand label repurchase intention (Y3)4.0032.099
Regional brand label recommendation intention (Y4)4.1872.377
Enterprise brand label repurchase intention (Y5)0.6000.491
Enterprise brand label recommendation intention (Y6)0.5100.501
Regional brand label repurchase intention (Y7)0.4360.497
Regional brand label recommendation intention (Y8)0.5550.498
WTPPWTPP for enterprise brand label (X1)9.5327.104
WTPP for regional brand label (X2)13.3037.564
Brand label identification (BLI)The brand label identifies4.4191.102
Brand culture identification (BCI)Brand labels contain brand culture information5.1481.816
Risk Perception (RP)Contain financial, psychological and social risk3.8341.222
TrustContain ability, honest and kindness5.8021.065

Note(s): Y1 – Y4: 1 = very reluctant; 2 = more reluctant; 3 = unwilling; 4 = uncertain; 5 = willing; 6 = more willing; 7 = very willing; Y5 – Y8; 0 = no; 1 = yes

Statistical results of consumers' WTPP

VariableObsMeanSDMinMax
Y13109.5327.104040
Y231013.3037.564028
Y2-Y13103.7716.511−3027

Note(s): The unit of WTPP is CNY/kg

Regression results of SWTPP based on ordered Logit model

VariableModel 1: Y1Model 2: Y2Model 3: Y3Model 4: Y4
X1−0.029* (0.015)−0.001 (0.014)
X2 0.026* (0.016)0.005 (0.014)
BLI0.529*** (0.125)0.136 (0.109)0.756*** (0.119)0.103 (0.109)
BCI0.192*** (0.072)0.044 (0.066)0.171** (0.081)0.102 (0.068)
RP−0.122 (0.109)−0.023 (0.104)−0.188* (0.106)−0.060 (0.108)
Trust0.539*** (0.136)0.209* (0.126)0.372** (0.145)0.214* (0.111)
Gender0.055 (0.256)0.109 (0.218)0.013 (0.241)0.125 (0.212)
Age0.076 (0.115)−0.134 (0.105)−0.091 (0.103)−0.122 (0.112)
Income0.175** (0.079)−0.013 (0.096)0.213** (0.086)−0.058 (0.097)
Education−0.157** (0.062)0.087 (0.069)−0.059 (0.063)0.055 (0.068)
Children0.153 (0.258)0.050 (0.246)−0.174 (0.236)0.162 (0.249)
Old−0.045 (0.255)−0.386* (0.229)0.253 (0.232)−0.457* (0.239)
Habit−0.014 (0.141)0.034 (0.135)0.133 (0.142)−0.024 (0.134)
Experience−0.032 (0.228)0.506** (0.224)0.790*** (0.256)0.319 (0.233)
Observations310310310310

Note(s): Robust standard errors in parentheses; ***p < 0.01, **p < 0.05, *p < 0.1

Regression results of SWTPP based on bivariate Probit model

VariableModel 5Model 6
Y5Y6Y7Y8
X1−0.021* (0.012)0.008 (0.011)
X2 0.024** (0.011)0.007 (0.010)
BLI0.301*** (0.081)0.131* (0.071)0.329*** (0.076)0.125* (0.071)
BCI0.120** (0.047)0.023 (0.047)0.049 (0.050)0.026 (0.046)
RP−0.084 (0.065)−0.038 (0.064)−0.076 (0.066)−0.050 (0.064)
Trust0.309*** (0.080)0.139 (0.086)0.261*** (0.092)0.185** (0.084)
Gender−0.006 (0.183)0.185 (0.168)0.149 (0.175)0.128 (0.169)
Age−0.012 (0.070)−0.099 (0.067)−0.023 (0.070)−0.070 (0.067)
Income0.095 (0.069)−0.074 (0.064)0.113* (0.067)−0.046 (0.063)
Education−0.064 (0.043)0.071* (0.040)0.014 (0.043)0.059 (0.039)
Children0.278* (0.168)0.039 (0.166)0.036 (0.172)0.021 (0.164)
Old−0.024 (0.168)−0.224 (0.161)0.012 (0.163)−0.294* (0.158)
Habit−0.038 (0.101)0.061 (0.098)−0.168 (0.104)0.026 (0.098)
Experience−0.023 (0.167)0.320** (0.156)0.291* (0.169)0.169 (0.159)
Constant−2.258** (0.910)−2.222** (0.894)−3.701*** (0.941)−2.111** (0.874)
Observations310310310310

Note(s): Robust standard errors in parentheses; ***p < 0.01, **p < 0.05, *p < 0.1

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Acknowledgements

The authors acknowledge the funding support by the National Social Science Fund of China under award number 18BJY132.

Corresponding author

Xiaoli Yang can be contacted at: yangxiaoli@syau.edu.cn

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