Effect of Agricultural Background on Individual’s Willingness- to-Pay for Safer Food Product (An Application of Treatment Effect)

Document Type : Research Paper

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Abstract

Evidence has shown that safer food products has a premium price comparing to the conventional ones, and consumers’ higher knowledge, specifically their agricultural awareness is one of the most important factors in buying decision and willingness to pay a premium for these products. Since finding effecting factors of increasing consumers’ purchase willing for these foods is an important issue in production and consumption planning and policymaking, the aim of this study is to introduce treatment effect and apply it to calculate effect of individual’s agricultural knowledge on their Willingness to pay (WTP) for safer food products in Tabriz City. Treatment effect is a special kind of sample selection problem refers to impact of receiving specific sort of training or educational classes called treatment, on a particular outcome variable. Due to their applied nature, treatment effects have received lots of attention in the recent economic literature. Data, was gathered in 2010, through randomized sampling, from 180 employee of Agricultural Administration in Tabriz City as the treated group, and 243 individuals whom their jobs or education were not related to agriculture, as the controls. Results revealed that agricultural background has positive and significant effect on people’s willingness to pay a premium for safer food products comparing conventional ones.

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JOURNAL OF AGRICULTURAL SCIENCE AND SUSTAINABLE PRODUCTION
Volume 24, Issue 3 - Serial Number 3
November 2014
Pages 132-143

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