Significant Price Premium Research Articles

Did product certification and e-commerce benefit agricultural producers in China?

This study investigates the impacts of product certification and e-commerce on various production and profitability outcomes for grain and cash crop producers in China, using nationally representative survey data. Employing multinomial endogenous switching regression (MESR) estimations, we find that agricultural producers who adopt e-commerce, product certification, or both strategies have significant price premium, increased sales revenue, and greater profitability, despite the increased production costs, with cash crop producer and large-scale producers gaining more benefits. Additionally, we find a synergistic effect: agricultural producers benefit more from adopting both product certification and e-commerce simultaneously than the sum of the effects of adopting two strategies separately. This positive reinforcement between the two strategies is more pronounced among cash crop producers compared to grain crop producers, as well as among larger-scale producers compared to their small-scale counterparts. These findings provide valuable policy implications for assisting agricultural producers in adopting suitable strategies, thereby enhancing their competitiveness and profitability within the global value chains of agri-food.

Geographical indications and organic labels: complements or substitutes? - the case of online rice consumption in China

ABSTRACT Agricultural producers are increasingly adopting a multi-certification approach for their agricultural products, which includes designations such as organic and geographical indications, instead of relying solely on a single certification. This inclination towards multiple certifications predominantly stems from a desire to optimize profits. Nevertheless, the ultimate profitability for producers hinges on whether consumers are genuinely inclined to pay a premium for these recognized certifications. This study employed the hedonic model to estimate consumers’ willingness to pay for the geographical indication and organic label in China and their interaction effect, focusing on rice as the product of interest. We collected data from one e-commerce platform in China, JD.com, and developed a dataset with 2484 observations based on the actual transaction price. The results reveal that Chinese consumers exhibit positive and significant price premiums for products with geographical indications, regardless of whether they are well-known or normal geographical indications. Furthermore, our findings suggest that the organic and geographical indication labels function as substitutes rather than complements. This underscores the importance of government efforts to intensify promotion, emphasizing the unique attributes of these labels and accentuating their differences.

Consumer Preference for Fisheries Improvement Project: Case of Bigeye Tuna in Japan

In recent years, demand for sustainable fisheries certification, also known as seafood ecolabeling, has grown worldwide, with retailers actively promoting ecolabeled seafood, mainly in Europe and the United States. However, the costs associated with assessment and maintenance are typically incurred before certification, and the potential benefits are uncertain, which deters many fisheries from entering the certification process. The Fishery Improvement Project (FIP) is a market-driven mechanism that allows a fishery to gain recognition for its sustainable management efforts aimed at achieving sustainable certification. Market differentiation of FIP-participating fisheries from conventional fisheries has the potential to generate additional benefits that may offset some of the certification costs. However, successful differentiation efforts require consumer awareness, willingness to pay a premium, and effective communication strategies. This study investigates consumer preferences for bigeye tuna sashimi in Japan using a discrete choice experiment to determine if Japanese consumers are willing to pay a price premium for FIP-participating fisheries. The analysis resulted in a significant price premium for FIP and domestic certification valued more than international brands. These findings suggest that FIP-participating fisheries have the potential for cost recovery, even during the certification process.

Walnut growers want rootstocks that can resist diseases

Abstract: English walnuts are the walnut species of choice for nut production. In the United States, edible English walnuts are almost exclusively produced in California, using soil and water resources on more than 370,000 acres. Scion cultivars of English walnuts are grafted onto rootstocks. Traditional rootstocks are seedling populations of so-called Paradox hybrids generated from crosses of black walnut with English walnut. These rootstocks are susceptible to soil-borne diseases, including crown gall, Phytophthora root and crown rot, and plant-parasitic nematodes. Strategies to respond to these diseases include the use of newly developed clonal walnut rootstocks with genetic resistance. In a survey conducted during 2020 through 2021, walnut growers revealed their willingness to pay higher prices for clonal walnut rootstocks with some disease resistance. The survey showed that they were most concerned with crown gall and nematodes, and were willing to pay significant price premiums for rootstocks that are resistant to these pathogens.

Evaluating front-of-pack voluntary well-being messaging for milk powders targeting Chinese older adults: A hedonic price model

This study examines the price structure of milk powders targeting Chinese older adults, with special emphasis on the assessment of front-of-pack (FOP) voluntary well-being messaging (VWM), using a hedonic price model. Data of 456 sets of product prices and attributes were collected from official stores at online shops, TMALL.com and JD.com, in China. Prices were recorded 10 d before, during, and 10 d after a major online promotion event (November 11, 2021). A hedonic price model was employed to decompose explicit market prices into individual product attributes implicit prices, including essential attributes, such as milk source, brand origin, package material, and nutritional composition, and nonessential attributes conveyed by FOP VWM, regarding nutrition, ingredients, health, sensory qualities, and certification. Results showed that above and beyond essential attributes, nonessential attributes conveyed by FOP VWM were significantly associated with price. Specifically, significant price premiums were associated with dietary fiber claims (+12.7%), no added sugar (+19.0%) and potential health benefits (+19.3%), as nutrition-, ingredient-, and health-related FOP VWM respectively. However, nutrition claims regarding calcium and fat were negatively associated with price (-21.2% and -8.0%, respectively, when they were presented). Additionally, nutrition claims for protein and vitamin D, introducing farm environment, referring to imported ingredients, declaring specific ingredients added, describing sensory characterizes and providing certificates on FOP were not significantly associated with price in this market. These findings provide manufacturers with information to better differentiate their products by producing and advertising attributes most valued by consumers.

Maximizing the benefits of using biosimilars in Egypt

BackgroundBiosimilars constitute a pathway for sustainable financing of healthcare systems in the era of expensive biologics. However, such a pathway is not free of challenges. Since the biosimilars market is expanding in Egypt, there is an urgent need for a policy framework to optimize their use and diffusion in the market. We aim to characterize a national framework based on the experiences of other countries and consultation with local experts.MethodsA narrative literature review was conducted to identify biosimilars’ policy elements worldwide. A workshop was organized with experts to discuss the narrative review findings and create consensus on recommendations.ResultsThe narrative literature review highlighted the need for biosimilar policy actions in four areas: market authorization, pricing, reimbursement, and uptake. Eighteen experts representing the Egyptian healthcare authorities attended the workshop. The most significant conclusions from the workshop included setting the price of the biosimilar at 30–40% less than its originator’s price and establishing financing protocols, in which the more expensive biologics with significant price premiums should be excluded from the formulary.ConclusionsA summarized national framework policy recommendation for biosimilars was created by local experts from the main public healthcare entities in Egypt. These recommendations coincide with the international policies adopted across different countries that aim to improve patient access while sustaining health expenditure.

The economics of art: price determinants and returns on investment in Indian paintings

PurposeThe valuation of artworks is challenging since their value encompasses economic, social and cultural values. This study examines two specific questions about the economics of Indian art market: first, the determinants of the price of paintings by Indian artists and second, the risk and return characteristics of investment in Indian paintings. The authors also analyze the role of local context for both questions.Design/methodology/approachThis study uses 8,865 paintings that are auctioned between January, 2000 and June, 2018. A generalized additive model (GAM) is employed to identify the determinants of auction prices and estimate art market price index.FindingsThe results indicate that the price of paintings in the Indian market is impacted by both global and local factors. Consistent with the previous research, this study finds that provenance, literature, living status of an artist, artist reputation, auction house, location and gender determine prices. However, the unique behavior of artwork medium and art movement affiliation in the Indian art market signifies the importance of local context in the valuation of artworks. An analysis of the second aspect of the study, i.e. risk and return characteristics of art investment, suggests that though overall art market returns are not lucrative, there are sub-sections in the market that outperform stocks and other assets. Further, the Indian art market shows a weak or negative correlation with other assets, thus making it a good candidate for a diversified portfolio. One of the important findings of this study is that artworks created by artists associated with the Bombay Progressive Artists' Group (PAG) command a significant price premium over all other artworks. Moreover, the average return on investment in paintings by artists affiliated to the Bombay PAG is not only significantly better than other art movements but also higher than all other art assets.Originality/valueThis study contributes to the growing literature on the economics of art market by providing a comprehensive analysis of the economics of Indian paintings. This research highlights the importance of local factors in price determination and on the risk and return characteristics of art investment. To the best of the authors’ knowledge, it is the most comprehensive study of the economics of Indian painting market and the first study to identify the relationship between Indian art movements and prices of paintings and returns on investment in paintings.

How do rice consumers trade off sustainability and health labels? Evidence from Vietnam

IntroductionStrategies for increasing rice production in the Asian Mega-Deltas have led to environmental degradation, resource overexploitation, and high greenhouse gas emissions. Certified sustainable production labels can support governments in their efforts to render rice value chains more sustainable by simultaneously fostering planetary and human health. Little is known, however, about how consumers trade off sustainability and health attributes in staple crops such as rice. This study aims to fill this knowledge gap by investigating Vietnamese consumers' preferences and willingness to pay for rice characterized by multi-attribute sustainability and health certification labels.MethodsWe collected empirical data from 410 supermarket consumers in Can Tho, Vietnam using a choice experiment survey. The results were analyzed using a mixed logit model to determine consumers' preferences for sustainability and health traits in rice. Four price levels were used to elicit willingness-to-pay for four certification labels: low-emission, eco-friendly, ethically produced, and low glycemic index rice. By separating the components that make up the concept of sustainability and by including a label related to personal health and diet preferences, we are able to gain an understanding of the value consumers place on attributes that benefit the common good vs. attributes that benefit the individual consumer.ResultsThe results showed that consumers were willing to pay a price premium for all certification labels, with the highest marginal utility assigned to low glycemic index rice.DiscussionCertification of eco-friendly and ethical production generated similar utility levels, while low-emission rice was valued lower, although it still fetched a significant price premium compared to the status-quo option of rice with no certifications. The results of this study can help policymakers and value chain actors develop rice value chains that integrate sustainable production practices as well as foster the nutrition and health of rice consumers.

Impact of Food Sustainability Labels on the Price of Rice in Online Sales.

Currently, the quality and safety of agricultural products and the enhancement of the agroecological environment are widely discussed. In response to solving the problem of insufficient exploitation of the market potential regarding sustainable agricultural products, this study uses rice on e-commerce platforms as an empirical case and constructs a hedonic price model aiming to explore the impact of the sustainable label on the price premium of agricultural products. The results show that: (1) There is a significant price premium for rice with sustainable labeling over ordinary rice, which is about 47.55%. In addition, within the types of sustainable labels, the price premium for rice with an organic food label is higher than that of rice with a green food label. (2) Except for the sustainable label, factors affecting the price premium of rice products include e-commerce platforms, rice varieties, package types, and whether it is imported. The price premium indicates the actual recognition and preference of consumers for agricultural products with the sustainable label. Departments of agricultural and food management departments should cooperate to improve the agricultural certification system (i.e., the sustainable label), further unblock a positive market mechanism of "green label-high quality-good price", and facilitate the green transformation of China's agricultural production from the consumer side.

Impacts of Beijing Bus Rapid Transit on Pre-owned Home Values

Bus Rapid Transit (BRT) has gained increasing popularity worldwide in the last few decades. However, few studies have investigated BRT’s impacts on property values in Chinese cities. This research, taking BRT route 1 (BRT1) and BRT route 3 (BRT3) in Beijing as examples, showed that proximity to BRT3 stops is weakly related to pre-owned home prices along the route, whereas BRT1 has induced a significant price premium. For BRT1, the impact is not linear. Specifically, pre-owned home prices for homes within 5–10 minutes’ walking distance to BRT stations is 5.35% higher than those located closer to or farther away. The difference between the two routes can be explained by resident income differences and BRT route alignments. For homes very close to the subway route, the impacts of BRT vanish.

The Impact of Hiawatha Light Rail on Commercial and Industrial Property Values in Minneapolis

The impact of proximity to transit on property values has become a key question in the debate on the relationships between public infrastructure investment and economic development. The focus has been on value captured by residential properties, with far fewer studies examining non-residential properties. Furthermore, few studies differentiate the effect of rail access and the effect of access to major interactions that later become station sites, and even fewer addressed the gradient of the accessibility effect. Based on the economic theory of firm location choice, this study develops hedonic pricing models to assess the value-added of the Hiawatha LRT on commercial and industrial properties, using data on properties sold before and after its completion. The results show that the LRT has induced a significant price premium for properties nearby and that the impact extends to almost 0.9 miles away from LRT stations.

Airport real estate values: What drives growth?

This paper offers guidance to airport managers who are evaluating their real estate and land asset management strategies. Through an international benchmark study of airport property values, it identifies the key factors of growth in land prices and rent levels, and quantifies the resulting increase in real estate values at the airport and in the surrounding airport area. The paper has three key findings. First, airport areas experience a long-term increase in property values across all land use categories, with the sharpest price increases taking place in the first ten years of development. Second, direct airport access generates a significant price premium, with commercial and industrial plots located in airport areas achieving higher property values and rent levels compared to competing locations that do not have direct airport access. Finally, eight key factors of growth that lead to long-term increases in airport property values are identified. The paper concludes with four key questions that decision makers should consider when evaluating their future real estate strategy.

Integrating sustainability into climate finance by quantifying the co-benefits and market impact of carbon projects

High-quality development rooted in low-carbon growth, new jobs, energy security, and environmental quality will be a critical part of achieving multiple sustainable development goals (SDGs). Doing this will require the dramatic scaling up of new climate finance while maximizing co-benefits across multiple outcomes, including for local communities. We developed a comprehensive methodology to identify different levels of local co-benefits, followed by an econometric analysis to assess how the market values co-benefits through the clean development mechanism. We find that projects with a likelihood of delivering the highest co-benefits received a 30.4% higher price compared to projects with the lowest co-benefits. Project quality indicators such as the Gold Standard, in conveying higher likelihood of co-benefits, conferred a significant price premium between 6.6% and 29%. Our methodology of aligning co-benefits with SDGs and the results of co-benefits valued by the markets indicate approaches to bolstering social and political support for climate finance.

Market Opportunities for US Aquaculture Producers: The Case of Branzino

The US is the world’s largest seafood importer by value, with an increasing share of imports composed of farmed seafood. Despite numerous policy initiatives, production and growth in the US aquaculture sector is limited, and there is a significant literature discussing potential explanations. In this paper the recent success of imported branzino is used to show that the market is not a constraint. Branzino is a portion-sized white-fleshed fish primarily farmed in the Mediterranean, with no obvious equivalents produced in the US. Since the turn of the century, imports have grown from zero to almost 10,000 metric tons, a quantity that would have made it the fourth-largest farmed fish species if produced in the US, and all is imported fresh. From 2015 when the quantities became more significant, the species entered the large whitefish market, although with a significant price premium relative to tilapia, the largest species in this market, indicating that the opportunity to create separate niches in the seafood market is limited.

Impact of Energy Rating on House Prices and Lending Rates

The real estate market is a key component of the green transition, and thus it is worth examining the pricing and financing costs of modern residential buildings in Hungary. In our study, we investigate a) whether a significant price premium can be identified for green properties based on new housing projects in Budapest, and b) whether banks finance residential buildings with more advanced energy technologies at lower interest rates. Based on our regression estimation, the green price premium is clearly evident in the Budapest new housing market: on average, homes with an energy rating of BB or better are 5.1 per cent more expensive than homes with an energy rating of CC. Based on our estimate of housing loan interest rates, no significant difference can be identified in the interest rates on loans granted to finance properties with a certificate higher than CC compared to loans granted for properties with CC certificate, i.e. banks do not yet factor energy aspects into the pricing of loans.

Analyzing the Influence of Metro Stations on Commercial Property Values in Delhi: A Hedonic Approach

Abstract The effect of proximity to a transit system on property values has become a key issue of debate regarding public infrastructure and economic development. This article aims to examine the impact of selected stations along the Blue line of Delhi Mass Rapid Transit System (MRTS) on commercial property prices. The research analyzed 1,413 commercial property parcels sold before and after the commissioning of Blue line in 2005. Hedonic Price Analysis (HPA) was used to estimate the effects of proximity to the metro rail on commercial property values. The method was applied to two time periods, i.e., from 2000-2004 and 2005-2008, coinciding with planning and construction (pre-commissioning phase and the operation phase (post-commissioning phase) of metro rail using actual sale prices of commercial units. The results indicate that a station node shows a negative trend during the planning and construction period. However, the operation period has produced a significant price premium associated with commercial properties, connected with improved accessibility. The coefficients indicate that MRTS has induced an increase in prices from INR 732.80 to INR 246.19, and its radius of impact covers an area of approximately 1/2 km from the stations. The methodology and results provide insight with a specific focus on commercial real estate values in other metropolitan cities developing and expanding MRTSs.

Requalifying markets of basic food commodities? An examination of the Round Table on Responsible Soy's implementation in Córdoba, Argentina

The Round Table on Responsible Soy (RTRS) is an international multi-stakeholder initiative whose certification scheme seeks to promote more economically, socially and environmentally sustainable practices in the soy sector. This paper offers an in-depth case study of Argentina's soy producing province of Córdoba in order examine RTRS′ attempt to requalify soy, a basic food commodity for which discussions around quality have traditionally tended to be marginal. Guided by a regulationist analytical framework, the empirical analysis shows that RTRS aims at producing some modest transformations in the production practices of the soy sector. However, due to this initiative's unsuccessful attempt to guarantee demand and significant price premiums for producers, the possibility of achieving such modest transformations becomes compromised. As a consequence, the case of RTRS makes visible some of the challenges and difficulties that emerge when markets of basic food commodities attempt to adopt the logic of quality markets.

Assessing consumer awareness, perception, and willingness to pay a premium for certified organic vegetables

ABSTRACT Global demand for organic foods outstrips supply creating a gap that developing-country producers may be able to capitalize on to expand market shares. In many African countries, the domestic market for certified organic vegetables is not well-developed to service rising demand. Most farmers remain uncertain whether premiums for certified organic vegetables will be high enough to warrant a switch from conventional vegetable production. The study assessed consumer awareness, perception, and willingness to pay a premium (WTP) for certified organic vegetables. A total of 250 vegetable consumers were sampled for the study. Perceptions of consumers and determinants of WTP premiums were obtained using perception indices and multivariate Tobit regression, respectively. About 71% of vegetable consumers were aware of certified organic vegetables. Consumers, generally, had a positive perception of certified organic vegetables. Vegetable consumers were willing to pay between 31% and 50% premium for certified organic vegetables. The socio-economic and demographic characteristics of consumers (household size, income, sex, age, education), attributes of certified organic vegetables (better taste, freshness, and health benefits), and awareness/support for organic certification were key determinants of WTP premiums. There is a significant price premium for certified organic vegetables to support the possible transition from conventional to organic production.

The spillover effect of trade policy along the value Chain: Evidence from China's rare earth‐related sectors

AbstractThis study examines the heterogeneous spillover effects of an export control policy from an upstream sector to its related downstream sectors. In 2010, China implemented tough policies on rare earth production and export that created a significant price premium for rare earth in foreign markets, thus offering downstream sectors in China cost advantages over their foreign competitors. This study exploits China's policy as an exogenous shock and performs a detailed examination of Chinese customs data. The results show that the export control policy has increased the export price of rare earth downstream products from China, whereas the effects on export quantity and value have been heterogeneous across sectors: they are significant for sectors in which the rare earth cost share is high, and the elasticity of substitution is low.

Quantifying the value of high-quality property management

Purpose“Ill-maintenance of common areas” in multi-owner residential properties is described as the “tragedy of anti-commons problem”. The problem can be addressed by outsourcing the management of the property to a company possessing quality property management (PMGT) certification. The PMGT certification is normally hailed as an effective means of reassuring occupiers and prospective property buyers of the good level of quality of the property management to be expected. This study investigated whether PMGT certification carries with it a price premium for residential properties.Design/methodology/approachA fixed-effects modelling approach was employed in relation to a large residential properties dataset in Hong Kong, in the period 2009–2018.FindingsThe results indicate, on average, that the PMGT certification commands a price premium of between 3.3 and 3.9%. This premium can be called, the “tragedy of anti-commons premium (TAC premium)”. The results further suggest that significant price premium differences relate to the four different types of certifications studied. The price of a residential unit managed by a property management company (PMC) with Q-mark certification is about 3.4% higher than a unit managed by a non-certified PMC, ceteris paribus. Likewise, corresponding price premiums for units certified related to ISO9001 and HKMAQA certifications are 3.5 and 2.4%, respectively.Originality/valueTo the best of author's knowledge, this is the first attempt to investigate if there is any relationship between the property price premium attributed to “tragedy of anti-commons” and PMGT certification.