Consumer preferences and willingness-to-pay for integrated production label on common beans

Integrated Production has been applied in Brazil since 1998/99 aiming to mitigate the negative environmental impacts of intensive production areas, and to improve the quality of beans produced. Economic and market analysis is fundamental in providing adequate and better understanding of the likely response of potential buyers regarding this kind of product, especially when a premium price is feasible. The objective of this study was to analyse consumer perception of beans with a hypothetical integrated production label and estimate consumer willingness-to-pay for labelled beans. Data were collected from a sample of 160 consumers living in Goiânia, Brazil, using a questionnaire survey based on a discrete choice approach. The attributes (and levels) used in the choice experiment were label (IP labeled vs. conventional), price (3 levels), and brand (preferred vs. fictitious). Multinomial logit and mixed logit models were used to analyze data. The findings indicate that consumers are sensitive to the presence of the hypothetical label and are willing to pay more for IP certified beans. Thus, there could be an unmet demand for safe and sustainable food products because consumers apparently prefer the certified alternative, even when brand is known and price is higher.