Determining South African consumers' willingness to pay for certified Karoo lamb : an application of an experimental auction

Abstract

Changes in the features of food demand and consumption have moved from the mass consumption model towards an increasing qualitative differentiation of products and demand. This movement towards addressing consumers’ demand for food products with more advanced quality attributes has led to increasingly complex food qualification processes and a proliferation of standards. Accompanying these changes in the agro-food system is a growing consumer concern for food safety and quality. One important attribute of “quality” is the origin of a food product. This paper focuses on lamb originating from the Karoo region of South Africa and tests consumers’ willingness to pay a premium for this specific origin attribute of the product. A random nth price auction was conducted to obtain willingness to pay estimates for a premium on a 500g packet of certified Karoo lamb loin chops. Various demographic and behavioural variables were linked to participants’ individual bids in order to determine the possible influence of these variables on participants’ bidding behaviour. A general positive willingness to pay for certified Karoo lamb was observed, with an average premium of R21.80/ kg recorded for loin chops. The impact of additional information was clearly visible as bids increased substantially after additional information regarding the product was introduced.