Econometric analysis of consumer preferences and willingness-to-pay for organic tomatoes in Palestine: Choice experiment method
Date
2019-02-14
Authors
Awad, Ibrahim
Abu Lateefeh, Hasan
Hallam, Arne
El-Jafari, Mahmoud
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Abstract
This study aimed to examine consumers’ willingness to pay a premium price for several environmental
attributes of organic tomato to increase both producer production and consumer health in Palestine.
The paper adopts the choice experiment method using the econometric analysis of the random utility
model. The research questions of this study focus on awareness of the importance of ensuring /
securing the environment, how many households in the West Bank purchase organic tomatoes,
reasons for which households may be willing or not willing to pay more for organic tomatoes, and the
main socio-economic variables that affect the households willingness to pay for organic tomatoes
when making organic tomatoes choices. The empirical results show that organic tomatoes are
preferred to conventional ones because of health claims by respondents so that we conclude that
respondents are willing to pay more for organic tomatoes compared to conventional ones. Additionally,
consumers prefer organic products because of health and environmental benefits. Some policy
measures might further promote the consumption of organic products. These include creating
awareness of the relevance of consuming organic products through effective marketing and educational
campaigns. However, there are about 500 organic farms in Palestine with a total area of 1’0000 square
meters mainly under fruit, almond, olives and dates. According to the Palestinian Agricultural Relief
Committee, organic pasturelands are not found because of the Israeli control (German Development
Agency GTZ) and according to the ministry of agriculture in Palestine, there are 24 organic olive farms
with a total area of 18885 square meters.
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Keywords
Econometric Models , Choice Experiment Method , Mixed Logit Model , Palestine , Willingness to Pay