Investigating the Effect of Contingent Valuation Question Formats on Households’ Willingness to Pay for Pesticides Free Fruits in Khyber Pakhtunkhwa

Abstract

The purpose of this study is to examine the effect of contingent valuation questions format on households ‘preferences revelation and willingness to pay (WTP) for chemicals free fruits in Khyber Pakhtunkhwa (KP) province of Pakistan. A sample of 1000 randomly selected households, from rural and urban areas of the KP province, were confronted with three different WTP questions for chemicals free fruits-double bounded dichotomous choice question, open-ended question and payment card question. Results show that households’ willingness to pay price premium for chemicals free fruits were 14 percent from open-ended question, 16 percent from payment card format and 25 percent from double bounded question. Regression analyses identified head’s age, education, monthly income, awareness regarding use of pesticides in fruit production and their impact on human health and natural environment as important determinants of households’ stated WTP for chemicals free fruits. The study concludes that households are willing to pay substantial price premium for chemicals free fruits and recommends growers to start their production on commercial scale. Findings of this split-sample study reveals that results of contingent valuation method are sensitive to WTP question format and recommends that proper guidelines must be followed in order to get accurate and reliable results.