Thai Consumers Willingness to Pay for Food Products with Geographical Indications

Pimsiri Seetisarn,Yingyot Chiaravutthi

doi:10.5539/ibr.v4n3p161

Pimsiri Seetisarn, Yingyot Chiaravutthi

Open Access

https://doi.org/10.5539/ibr.v4n3p161

Copy DOI

Abstract

Geographical Indication (GI) is a name, or sign, that refers to a specific characteristic of geographical location or origin. GI is used to both protect and guarantee that the product has a unique characteristic, resulting from being qualifiedly produced in a specific place. There are many products in Thailand that have been certified by the Ministry of Commerce, carrying the GI label. The purpose of conducting this research is to study Thai consumers’ willingness to pay (WTP) for products with GI labels. This experiment was carried out under the nth price auction method on Doi Tung coffee, Tung Kula Ronghai Thai Hom Mali rice, and Chaiya salted eggs. Sixty participants were asked to offer bids for three products each with different types of labels, a normal label; a label stating the product’s origin; and a label which stated the product’s origin and contained a GI sign. The results show that Thai consumers’ WTPs are influenced by the origin of the product. However, the WTPs of GI labels do not significantly differ from the WTPs of labels which state the product’s origin. This implies that Thai consumers value the product’s origin, but do not recognize the importance of the GI label.

Highlights

Geographical Indication (GI) registration creates pride for agriculturists in their locally made products, and deters them from migrating from their place of origin
Focusing on the consumers’ Willingness To Pay (WTP) for each product, the average bid for origin labels and GI labels are higher than the average bid for normal labels
T-test statistics were carried out to ascertain the differences between average bids for the normal label, the origin label, and the GI label

Summary

Introduction

GI registration creates pride for agriculturists in their locally made products, and deters them from migrating from their place of origin. The value of products with GI labels will increase once they are viewed as premium grade products. This was highlighted by the Director General of Thailand’s Department of Intellectual Property at the regional GI conference, on June 11th in Bangkok. Certain agricultural products in Thailand with GI status have witnessed 20% to 30% price increases (Tunsarawuth, 2009). The price of Sangyod rice has increased from 40 to 60 baht per kilogram since it was registered as a GI product (Food Industry Thailand, n.d.). Since GI is considered to be fairly new to most consumers in Thailand, the main purpose of this paper is to study Thai consumers’ behavior, their demand for food products with GI labels. GI involves a development in the production system, and many parties will benefit from this development including the producers, consumers, and the country

Objectives

Methods

Results

Conclusion