Consumer Preferences and Willingness to Pay for Country of Origin Labeled Product in Istanbul

Abstract

Consumers' interest in locally produced foods is growing over the last years. Thus, studying consumers' preferences for local foods and understanding the underlying causes of this demand increase and willingness to buy local food products could be conducive to further development of local food markets. Country-of-origin labeling (COOL) is being implemented in different forms and degrees in Turkey and other countries across the world. In this study we focused on two different COOL food products from Turkey, namely Ayvalik olive oil and Ezine cheese. A survey was undertaken in the area of Istanbul aimed at studying consumer preferences for those products compared to their conventional counterparts. The willingness to pay equation has been specified as a two-step decision process, taking into account the results obtained from the two consecutive questions, willingness to pay a premium and how much consumers are willing to pay. If the decision will be consuming COOL product, different demand models (Heckmann models) were estimated. For these products, for that purpose, different price sets were defined to the consumers to evaluate how much they will pay extra. In conclusion we found out that, consumers are aware of those products and willing to pay a price premium. For AyvalA±k Olive oil they are willing to pay 82 percentages more than conventional alternatives. For Ezine Cheese they are willing to pay a premium almost 4 times up to conventional cheese products.