Does award and origin labeling influence consumers’ willingness-to-pay beyond sensory cues? An experimental auction on improved Philippine tablea (cocoa liquor)

Abstract

Origin-based identification and awards are used by craft chocolate makers as cues to signify superior quality and more inclusive practices. However, there is a lack of consumer choice and willingness to pay (WTP) literature that explores the impact of sensory and external cues, particularly award and origin labels, of craft chocolates. Thus, this study aims to combine hedonic and WTP measurements through an experimental auction of three Philippine tablea (cocoa liquor) variants from three origins (i.e., Bohol, Bicol, and Davao) in the Philippines. Information was revealed in a four-round second-price auction: blind condition, award or origin label (randomized order), and informed condition. Results indicated that participants were willing to pay a premium to switch their endowed tablea to the three auctioned tablea. Hedonic and WTP measurements resulted in an overall consistency of the hierarchy of preference between tablea variants. Award and origin significantly improved sensory ratings and WTP premiums for the three variants. Econometric analyses revealed that taste positively influenced the propensity to exchange and WTP premiums for all variants. In conclusion, this study found that taste was the most vital factor in choosing tablea, while award and origin labels may be used to further enhance perceived quality and value.