Consumers' Willingness to Pay for Environmental Attributes of a Cut Flower in Ethiopia: A Choice Experiment Approach

Abstract

The paper aims at valuing consumers' willingness to pay for environmental attributes of a cut ower using choice experiment and hence identifying the presence of a hypothetical market for environmental friendly owers. Considering the local and global environmental impacts of floriculture, two environmental attributes of a cut ower namely, Eco-labeling (EHPEA-CP label) and Carbone footprint together with a price attribute were selected for choice experiment. Survey data from 200 randomly selected consumers were employed and two multinomial logit models and a random parameter logit model were used for estimations. The estimated results from all models reveled that respondents had the willingness to pay for both environmental attributes of a cut flower and they were willing to pay 1.98 birr and 10 birr for eco-label and carbon footprint attributes of a cut flower respectively, valuing carbon footprint more than eco-labeling. Based on the welfare estimates, consumers were willing to pay 10.47 birr for a bronze labeled and carbon neutral cut flower; 12.45 birr for a ower with silver brand and medium (neutral) carbon footprint and 24.43 birr for brand gold and carbon saving (low) flower. Thus, environmental friendly owers may nd a niche market in Ethiopia.

Keywords

• Environmental Attributes,Choice Experiment,Willingness to Pay,Cut Flower

References

1. Adamowicz, W., J. Louviere, and J. Swait (1998). Introduction to attribute-based stated choice methods. NOAA-National Oceanic Athmospheric Administration, Washington, USA.