Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/287911 
Year of Publication: 
2023
Citation: 
[Journal:] Australian Journal of Agricultural and Resource Economics [ISSN:] 1467-8489 [Volume:] 67 [Issue:] 1 [Publisher:] Wiley [Place:] Hoboken, NJ [Year:] 2023 [Pages:] 83-103
Publisher: 
Wiley, Hoboken, NJ
Abstract: 
As in many high‐income countries, there is increasing awareness towards organic farming in many low‐ and middle‐income countries. Sustained local demand is an essential requirement for further adoption of organic farming by smallholders, who typically have only limited access to export markets. Until now, only few studies have explored the local willingness to pay (WTP) for organic products in low‐ and middle‐income countries in real purchase situations. This paper analyses the consumers' WTP for organic rice in urban and suburban Indonesia using an incentive‐compatible auction based on the Becker–DeGroot–Marschak (BDM) approach. We further study the effect of income and a randomised information treatment about the benefits of organic food on respondents' WTP. Estimates suggest that respondents are willing to pay an average price premium of 20% compared with what they paid for conventional rice outside our experiment. However, our results also indicate that raising consumers' WTP further is complex. Showing participants a video about health or, alternatively, environmental benefits of organic food was not effective in further raising WTP. The results can be used as a basis for the design of alternative awareness measures to increase knowledge, interest and demand for organic food.
Subjects: 
BDM
Indonesia
organic food
rice
willingness to pay
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article
Document Version: 
Published Version

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