The purpose of this paper is to evaluate the consumers’ preferences in middle- and high-income districts in Lima for three organic and Fairtrade certification attributes: environmental protection, production without pesticides, and improvement in the quality of life of farmers. Yellow chili pepper was used as case study.
A survey of 183 households was conducted among the population located in middle and high income districts in Lima, because of their higher ability to pay. Choice experiment data were analysed using random parameter logit models (RPM) with and without interaction effects.
The results suggest that there is a statistically significant willingness to pay for organic and Fairtrade certification attributes (ranging from S/4.4 to 9.3). The results also indicate that the higher the income the higher the willingness to pay for yellow chili peppers grown without pesticides.
The results provide support that willingness to pay values for particular food certification attributes are statistically significantly associated with the ability to pay even among the middle and high income population in Lima. This positive association between willingness to pay and income is not always present among the general population in developed countries. As such, the demand for certified products would be especially associated with the overall economic growth of the emerging and developing country under consideration.
The research was funded by the Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ) through the project “Unravelling the potential of neglected crop diversity for high-value product differentiation and income generation for the poor: The case of chili pepper in its centre of origin”. The author would like to acknowledge Alicia Garcia for organizing the enumerators and collecting the survey data in Lima, Peru.
Garcia-Yi, J. (2015), "Willingness to pay for organic and fairtrade certified yellow chili peppers: Evidence from middle and high income districts in Lima, Peru", British Food Journal, Vol. 117 No. 2, pp. 929-942. https://doi.org/10.1108/BFJ-11-2013-0321
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