Consumer Valuation of European Certification Labels on Extra Virgin Olive Oil: Assessing the Impact of Multiple Labels and Consumer Heterogeneity

Abstract

ABSTRACTMultiple food certification labels are a significant trend in food marketing, yet their impact on consumer decisions remains insufficiently understood. This study used a choice experiment to assess consumer valuation of European organic and Protected Designation of Origin (PDO) labels on extra virgin olive oil, considering consumer heterogeneity. The data were analyzed using a willingness-to-pay-space model and a binary probit analysis. Results indicate positive valuation of both labels when presented individually, with a higher premium price for organic farming (2.16€/L) than PDO (1.79€/L). The introduction of multiple labels reveals the presence of a sub-additivity effect and leads to the emergence of distinct consumer segments. The majority displays a negative willingness to pay, indicating strong substitution effects, while a minority perceives the labels as complementary. Moreover, some consumers are willing to pay a premium price for one label, but adding a second label undermines the effectiveness of the individual label.KEYWORDS: Multiple labelingorganic certificationProtected designation of origin (PDO) certificationchoice experimentwillingness-to-pay-space AcknowledgmentsThe author would like to thank Dr. Vincenzina Caputo for her valuable assistance with Bayesian design, Dr. Achilleas Vassilopoulos for his comments on the choice model results, and Dr. Constantine Iliopoulos for language editing. Also, the author would like to thank the anonymous reviewers for their valuable suggestions and comments.Disclosure statementThe author declares that she has no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.Data availability statementData will be made available on request.Notes1 It was chosen PDO over PGI because PDO certification is prevalent among Greek products according to the official European database of agricultural products and foodstuffs, wine, and spirit drinks that are registered and protected across the EU for their geographical indications. Specifically, 69% of the certified products in Greece are protected for the designation of origin and in the specific case of olive oil, 63% of the certified olive oils has a PDO certification. Furthermore, results from the in-depth interviews revealed that Greek consumers recognize more the PDO certification than the PGI. Literature confirms that Italian olive oil consumers (who reveal similarities in food consumption with Greek consumers due to the fact that olive oil is part of the traditional diet for both countries) are willing to pay more for PDO than PGI label (Aprile et al., Citation2012; Menapace et al., Citation2011).2 Removing brand influences from the choices, can make respondents focus the tradeoffs upon the attributes’ levels.3 According to Louviere and Street (Citation2000), in order to make the choice experiment more comparable to real food shopping situations, consumers must have the opportunity to decide not to buy any item.4 Since the introduction of “cheap talk” script by (Cummings & Taylor, Citation1999), several studies have used it as a way to minimize hypothetical bias in online surveys (Carlsson & Kataria, Citation2008; Tonsor & Shupp, Citation2011; Van Loo et al., Citation2011).