Contingent valuation versus choice experiment: estimating the willingness to pay for organic oranges in Vietnam

Abstract

PurposeThe study estimates the willingness to pay for organic oranges and identifies its influencing factors among consumers in the Mekong Delta, Vietnam.Design/methodology/approachThe study used survey data from 413 households in the Mekong Delta from March 2022 to July 2022. The choice experiment (CE) and contingent valuation method (CVM) were employed to analyze consumers’ willingness to pay (WTP). STATA 17 software was used to analyze research data in the logit model and mixed logit model.FindingsThe research results from the CVM approach show that a number of demographic characteristics have a direct impact on WTP, such as education, educational attainment, family size, the presence of children and the elderly in the household, food safety and environmental awareness. The CE model shows product attributes that influence consumers’ WTP, such as country of origin, traceability, quality grade, organic certification, ecolabel and organic content. Both approaches show that price is the main barrier to organic orange consumption.Research limitations/implicationsThe study surveyed four large cities in four provinces representing the Mekong Delta region.Practical implicationsOur study helps administrators have a deeper insight into consumer preferences and behavior, specifically the factors that affect consumers' WTP, an important indicator of demand for the success of manufacturers and marketers in developing as well as improving marketing strategies. Knowledge of a product’s WTP on behalf of (potential) customers plays an important role in many areas of marketing management, such as pricing decisions or new product development.Social implicationsFurthermore, this understanding will inform policymakers about the future of agricultural markets in Vietnam and help them better prepare for the making of sustainable agricultural policies. Develop organic agriculture to both protect human health, protect the living environment and protect the soil from degradation, ensuring sustainable agricultural production. This is also one of the measures to help people stay away from diseases to limit the social burden.Originality/valueThe study confirms that both CVM and CE models can be used to estimate WTP. However, CVM fits the overall WTP estimate, while CE is more appropriate when estimating WTP for individual scenarios through combining attributes with different levels.