Is the information sufficient to create a new market for digestate?

Abstract

Unfamiliarity with a good reduce the chances to be used by consumers. This is the case of digestate which is an organic soil conditioner obtained as by-product of biogas chain. The use of digestate as alternative to traditional manure is still not very widespread due to the lack of knowledge among farmers. In our survey, we explored whether providing farmers with information about the digestate can affect farmers’ willingness to pay for buying it instead of the traditional manure used by farmers as soil conditioner. By conducting a hypothetical multiple-price list experiment we show that information positively affects farmers’ willingness to pay (WTP) for digestate but information alone is not sufficient to create a new market for it because at the same price farmers always continue to buy manure. This finding raises some questions when estimating the effect of information, which while positive does not shift farmers’ decisions to use an unfamiliar good. This result suggests that information provided to farmers elicited a WTP not sufficient to replace traditional manure with digestate.