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Effects of quality claims on willingness to pay for organic food: Evidence from experimental auctions in Croatia

Marin Cagalj (Department of Applied Sciences, Institute for Adriatic Crops and Karst Reclamation, Split, Croatia)
Rainer Haas (Institute for Marketing and Life Sciences, University of Natural Resources and Life Sciences Vienna (BOKU), Vienna, Austria)
Ulrich B. Morawetz (Department of Economic and Social Sciences, University of Natural Resources and Life Sciences Vienna (BOKU), Vienna, Austria)

British Food Journal

ISSN: 0007-070X

Article publication date: 5 September 2016

Abstract

Purpose

Claims about environmental impact, health effects and taste of food products are restricted in the EU. The purpose of this paper is to quantify how much such claims would change the willingness to pay (WTP) for organic products in Croatia.

Design/methodology/approach

For estimating the WTP under different claims the authors used an experimental auction. Participants (258) bid for real food products (organic and conventional tomatoes and apples) and are endowed with cash at a location where they usually go shopping.

Findings

For the sample the authors find that consumers are willing to pay on average a premium of 42 percent for organic apples and 59 percent for organic tomatoes. On top of that, WTP increases between 16-20 percent for environmental claims and 12 percent for health claims. Taste-related claims are not significant.

Practical implications

Sellers and producers of organic food can benefit from adding claims to organic labels. To protect consumers from manipulation, regulators are well advised to be cautions when allowing claims about credence attributes of food.

Originality/value

The authors quantify the influence of claims about organic products on the WTP by using experimental auctions which are particularly suitable to investigate effects which cannot be observed on the market.

Keywords

Citation

Cagalj, M., Haas, R. and Morawetz, U.B. (2016), "Effects of quality claims on willingness to pay for organic food: Evidence from experimental auctions in Croatia", British Food Journal, Vol. 118 No. 9, pp. 2218-2233. https://doi.org/10.1108/BFJ-11-2015-0453

Publisher

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Emerald Group Publishing Limited

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