Assessing consumer preferences for organic vs eco-labelled olive oils

Abstract

In this study, a choice experiment was performed to investigate consumer preferences and willingness to pay for a set of eco-labels on extra-virgin olive oil. Specifically, we tested three types of eco-labels indicating that the olive oil was (i) obtained from ancient trees, (ii) produced in mountainous areas, and (iii) obtained with sustainable water use. These three different eco-labels were analyzed in combination with the well-known organic label and other relevant attributes of extra-virgin olive oil. The choice experiment was based on a consumer survey carried out in Italy, the largest olive oil consuming country in the world, in January–February 2017. A market research agency recruited a nationally-representative total sample of 1061 participants who were involved in a web-based interview. Consumer choices were analyzed using a Random Parameter Logit model. The main result of the study is that, on average, Italian consumers are willing to pay a significant premium price for all the tested eco-labels on extra-virgin olive oil with the organic label being the most preferred eco-label. However, high heterogeneity in consumer preferences was also detected.