Private versus public benefits: a field experiment on consumers' willingness to pay for organic and local food.

Last registered on January 27, 2023

Pre-Trial

Trial Information

General Information

Title
Private versus public benefits: a field experiment on consumers' willingness to pay for organic and local food.
RCT ID
AEARCTR-0010404
Initial registration date
January 24, 2023

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
January 27, 2023, 12:40 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Region

Primary Investigator

Affiliation
The Penn State University

Other Primary Investigator(s)

PI Affiliation
The Pennsylvania State University
PI Affiliation
The Pennsylvania State University
PI Affiliation
National Chung Hsing University
PI Affiliation
National Chung Hsing University
PI Affiliation
National University of Kaohsiung

Additional Trial Information

Status
In development
Start date
2023-01-02
End date
2023-03-31
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
The study aims to investigate consumers’ choices for imported organic and local food to help separate motivations based on perceived health and food-safety (private) benefits versus environmental (public) benefits. Specifically, we will conduct a field experiment in supermarkets and farmers’ markets in Taiwan to investigate how information on the private and public benefits of organic and local food respectively affect consumers’ willingness to pay for potatoes.
External Link(s)

Registration Citation

Citation
Huang, Chiu-Lin et al. 2023. "Private versus public benefits: a field experiment on consumers' willingness to pay for organic and local food. ." AEA RCT Registry. January 27. https://doi.org/10.1257/rct.10404-1.0
Experimental Details

Interventions

Intervention(s)
We will distribute flyers in the places where we conduct the experiment to inform people that anyone who would like to buy potatoes and earn extra money could join our experiment . In this experiment, participants will first be randomly assigned to four conditions: (1) control group without information; (2) pesticide residue information (private benefit) treatment; (3) food miles information (public benefit) treatment; and (4) pesticide residue and food miles information treatment. They will use price lists to indicate their willingness to buy or not buy with different prices for the four different types of potatoes: (1) local organic; (2) imported organic; (3) local but non-organic; and (4) imported but non-organic, with the same weight and similar size (around three potatoes per bag), and we then collect the WTPs from the price lists. After the WTP stage, they will take a short survey about their knowledge and attitudes toward food and their socio-demographic information. In the end, participants will receive cash compensation and might use part of it for buying potatoes. We will play a lottery with participants based on their previous answers to determine whether a potato purchase is made. To be more specific, we use the Becker-DeGroot-Marschak (BDM) method to elicit the WTPs. BDM is a mechanism widely used in experimental economics as an incentive-compatible procedure. If participants stated previously that their maximum WTP for the potatoes is greater than or equal to a randomly drawn selling price, then the participants acquire the potatoes at the selling price. If the maximum WTP for the potatoes is lower than the selling price, there will be no transaction. Participants will be taught about this method at the beginning of the experiment. Only one type of potato will be selected in the game of purchase, so all participants will receive cash only or a combination of cash and a bag of potatoes.
Intervention (Hidden)
Intervention Start Date
2023-02-01
Intervention End Date
2023-03-31

Primary Outcomes

Primary Outcomes (end points)
1. Willingness to pay for potatoes
2. Private benefits dominating
Primary Outcomes (explanation)
1. Willingness to pay for potatoes: the willingness to pay for potatoes collected using the price lists on the scale from $0 to NT$130 (around US$4).
2. Private benefits dominating: indicator equal to one if WTP for imported organic potatoes minus WTP for local non-organic potatoes is greater than 0.

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Using a lab-in-the-field experiment, this study aims to investigate consumers’ choices for imported organic and local food to help separate motivations based on perceived health and food-safety (private) benefits versus environmental (public) benefits.
We plan to recruit 400 participants who are interested in buying potatoes in several supermarkets and farmers’ markets in Taiwan. Participants will receive cash compensation and might use part of it for buying potatoes at the end of the experiment. To study the importance of private and public benefits on the WTP for potatoes, we give participants two types of information. With one treatment, we give participants information about the private benefit of buying organic by describing the smaller presence of pesticide residues on organic food. With a second treatment, we give participants information about the public environmental benefit of buying local food by noting the substantially less distance that Taiwanese-grown potatoes travel to market. These two information treatments result in four conditions, to which participants are randomly assigned: (1) control group without information; (2) pesticide residue information (private benefit) treatment;(3) food miles information (public benefit) treatment; and (4) pesticide residue and food miles information treatment. After reading the information, we collect in a price list the WTP for four different types of white potatoes (local organic, local non-organic, imported organic, and imported non-organic potatoes) with the same weight and similar size (around three potatoes per bag). We use the Becker-DeGroot-Marschak (BDM) method to elicit WTPs. BDM is a mechanism widely used in experimental economics as an incentive-compatible procedure. If participants stated previously that their maximum WTP for the potatoes is greater than or equal to a randomly drawn selling price, then the participants acquire the potatoes at the selling price. If the maximum WTP for the potatoes is lower than the selling price, there will be no transaction. Participants will be taught about this method at the beginning of the experiment. Only one type of potato will be selected in the game of purchase, so all participants will receive cash only or a combination of cash and a bag of potatoes. After the WTP stage, participants complete a short survey about their knowledge and attitudes toward food and their socio-demographic information.
Information treatments: Participants receiving the private information treatment will receive the message: “A 2020 inspection report of the Agricultural Drugs and Toxic Test Institute of the Executive Yuan indicates that 617 root vegetables were randomly tested. 83 of them contained pesticide and fungicide residues. Intaking these chemicals might increase the risk on health. According to agricultural regulations, organic food produced in Taiwan is required to have zero pesticide residue” (Chiu et el., 2018 and Website of Council of Agriculture in Taiwan). We expect the information to increase WTPs for organic potatoes, including imported and local organic ones. On the other hand, participants receiving the public information treatment will receive the following message: “Imported food, whether it is organic or not, is packed, refrigerated, and shipped with long distancing. For example, local potatoes in Taiwan travel less than 115 miles, but imported potatoes travel over 6324 miles on average before they are consumed. It costs more fossil fuels than for local food, and it could bring a burden on the environment” (Grebitus et al., 2013 and Website of Council of Agriculture in Taiwan). We expect the information to increase WTPs for local potatoes, including the local organic and local non-organic ones. Participants in the third information treatment group will receive both messages. We expect that after receiving both pieces of information, WTPs for imported organic potatoes will be higher than WTPs for local non-organic potatoes, as participants may be more concerned with private benefits than environmental benefits.
While information effects are the main subject of this study, heterogeneity among consumers may also play a significant role. We expect that by controlling for all other demographic characteristics, people with more knowledge about food will be less influenced by the information we provide. We also anticipate that people who are more altruistic, people who trust the agricultural regulations in Taiwan, and people who have more pro-environmental attitudes will act differently from others.
Experimental Design Details
Randomization Method
Randomization will be done through random selection by enumerators.
Randomization Unit
Individual will be the unit of randomization.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
400 respondents
Sample size: planned number of observations
100*4=400 respondents
Sample size (or number of clusters) by treatment arms
100 respondents per treatment
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
Penn State Institutional Review Board
IRB Approval Date
2022-11-03
IRB Approval Number
STUDY00021331

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials