Primary Outcomes (explanation)
Behavior in terms of WTP will be measured using the contingent valuation strategy, which is a direct measurement that captures hypothetical WTP. This strategy is particularly useful to capture the price premium that a consumer is willing to pay for one additional attribute (here the label) of the product (Liebe, 2007). It is most suitable when prices are non-existing in the market place, such as the case for a particular attribute (Petrakis, 2015). According to Katt and Meixner (2020) the contingent valuation method is one of the most frequent stated preference methods for eliciting WTP in the context of organic food consumption.
We will elicit the WTP of the participants by using the introduced iterative multiple price list method (iMPL) by Andersen et al. (2007) to overcome some of the disadvantage of interval measures using multiple price lists, multiple switching points. We ask the respondents iteratively to choose one of the presented intervals of premiums they would be maximal willing to pay in addition to the current price of a similar chocolate without the Fairtrade label, i.e. what the highest € amount is before they would rather not like to buy the Fairtrade chocolate but prefer to take the conventional chocolate without a premium. In the first round participants have to choose whether to pay a premium at all or one of the three different intervals: 0.01 € to 1,00€, 1,01 € to 2,00 €, or 2,01 € to 3,00 €. In the second round, participants who chose an interval, are now asked to choose one of ten more refined intervals where i indicates the smallest full Euro amount in the chosen interval and j the largest full Euro amount: i.01 € to i.10 € , i.11 € to i.20 €, i.21 € to i.30 €, i.31 € to i.40 €, i.41 € to i.50 €, i.51 € to i.60 €, i.61 € to i.70 €, i.71 € to i.80 €, i.81 € to i.90 €, or i.91 € to j.00 €.
The selected range is supported by the literature. Didier and Lucie (2008) find an average bit in their study for fair-trade chocolate of 1.18 € with the smallest WTP premium within subjects in different stages is 0.25 €. For a fair-trade 100g chocolate bar compared to a conventional one Rousseau (2015) finds a price premium of 2.03 € and Teyssier et al. (2015) 0.458 € in a private WTP elicitation and 1.044 € in a public WTP elicitation. Poelmans and Rousseau (2016) find a WTP premium of 10.86 € per 250g for fair-trade chocolate compared to the same product without a label (This equals a WTP premium of €4.344 per 100g), however, their sample consists of chocolate lovers and not average consumers. We choose intervals of 10 cents as the finest interval option; we are confident that the 10-cent interval ensures enough precision for eliciting the WTP premium for Fairtrade chocolate, as the smallest detected WTP premiums for fair-trade chocolate compared to conventional chocolates are larger than €0.20 (Didier and Lucie, 2008; Poelmans and Rousseau, 2016; Rousseau, 2015; Teyssier et al., 2015).
The iMPL method identifiers intervals clearly and so ensures that there is only one switching point (Andersen et al., 2006).
Even though a price anchor, i.e. stating how much the conventional chocolate bar costs, would increase precision by reducing the spread of responses, we do not provide an anchor price because the price of a bar of chocolates is well-known among consumers. This also implies that we cannot use the measured WTP premium as an absolute value, however, this is no obstacle for our study as we are only interested in identifying the relative WTP depending on the treatment.