The Effect of environmental attitude and lifestyle on consumers’ willingness to pay a price premium for potato with the Organic National label

Background and Purpose
Sustainable production without causing harm to the environment is highly valued by environmentally conscious consumers, who are willing to pay more for these products. Therefore, it is crucial to investigate consumers’ willingness to pay and analyze their behavior towards these products in order to successfully develop the market and move towards sustainable production. The aim of this study was to estimate consumers' willingness to pay an extra amount for potato with the Organic National label, compared to regular one, considering demographic characteristics and focusing on individuals' environmental attitudes and lifestyles indices.
Materials and Methods
Contingent valuation is one of the most important valuation methods based on stated preferences in which, the consumers' willingness to pay for a new product is estimated via creating a hypothetical market. Given that potatoes with the Organic National label is a hypothetical commodity for which there is no market, to estimate consumers’ willingness to pay for this product, contingent valuation method based on double-bounded dichotomous choice questionnaire was used. Data analysis was performed using the interval regression model. The required data were collected by completing a questionnaire from the citizens of Shiraz with the sample size of 384 people in July and August 2022.
Results
The results showed that socio-economic characteristics of consumers, including age, education level, total monthly household expenditure, lifestyle and environmental attitude are factors affecting consumer's willingness to pay a price premium for potato with the Organic National label. The variables of gender and monthly household expenditure on potato did not have a significant effect on the willingness to pay an extra amount foe potato with the Organic National label. lifestyle and environmental attitude indices were significant at 1% level, with a positive sign. This shows that consumers who have a positive perception of the relationship between potato production with the Organic National label and the reduction of environmental problems, and who believe in the positive effects of consuming organic potatoes on their health and quality of life, are willing to pay more for this organic product compared to the conventional one.
The highest average willingness to pay a price premium was related to university-educated consumers with the highest lifestyle and environmental attitude indices, which was estimated to be equal to 207763 Rials per kilogram for potato with the Organic National label. On the other hand, the families whose heads did not have university education and had the lowest values of lifestyle and environmental attitudes indices, had the least average willingness to pay a price premium equal to 261 Rials per kilogram of potatoes with the National Organic label. The average willingness to pay a price premium for one Kg of potato with the National Organic label at the average of lifestyle and environmental attitude indices for consumers with and without university education was estimated to be equal to 26996 and 9897 Rials, respectively.
Conclusion and Discussion
Findings indicated that concerns about healthy diet and environmental degradation are important factors increasing consumers’ willingness to pay a price premium to purchase potato with the Organic National label. The study findings rely on consumers having trust in the Organic National label. Hence, setting consistent food labeling criteria that instill confidence in consumers can support the expansion of the organic products sector, ultimately benefiting producers. Results showed that, family income has a limiting role on consumers' willingness to pay a price premium for organic potato. Therefore, it is recommended that the government support low-income households to provide healthy and organic foods in order to improve the health of society.