Willingness to pay for higher environmental standards for avocado production in Great Barrier Reef catchments

Abstract

There is substantial evidence that consumers prefer food to be produced at higher environmental standards. There are two main options for improving demand signals for environmentally sensitive production through markets: ecolabels, where consumers can choose to buy differentiated products, and environmental standards, where consumers can opt for higher standards at higher costs. Yet there is limited information about the extent to which consumers would be willing to pay extra and support these options. In this study we apply three separate parallel non-market valuation experiments (best worst scaling, contingent valuation and discrete choice experiments) in a survey of Australian households to identify the level of consumer support for avocados to be produced at higher standards. We estimate both the willingness to pay and the proportion of consumers prepared to support ecolabelling and environmental standard approaches, correcting for quantity changes and factors affecting support. Our case study application is avocado production in catchments of the Great Barrier Reef in Australia, where we find a similar willingness to pay per unit for five star water quality improvements under the ecolabelling option with a discrete choice experiment ($0.22/unit) compared to the environmental standards option assessed with contingent valuation ($0.22/unit). The key insight from our work is that assessing the quantum of consumer support is more important than assessing the price premiums, and that more consumers will support universal higher environmental standards than ecolabelled options.