Factors Affecting Consumer's Potential Willingness to Pay a Premium for Safe Food Products (Case Study: Agricultural Administration of East Azerbaijan)

Augmentation of applying the unnatural and mainly chemical inputs by humankind causes increasing rate of disease and arisen environmental problems. In these circumstances, the importance of safe food production is getting clearer. With respect to that, understanding the determinants of consumer's willingness to pay for these safer products is becoming increasingly important in the field of production and consumption planning. In this regard, the purpose of this study is to investigate factors affecting the consumer's willingness to pay the premium for the safer food products. A contingent valuation survey of 180 respondents was conducted during spring and summer of 2009 in Agricultural administration of East Azerbaijan. An Ordered Logit regression model was applied to determine factors effecting consumer's willingness to pay for safer food products. The survey results have shown that about 97 percent of the respondents would be willing to pay a premium. Also, 84 percent of consumers would be willing to pay about a premium between 5 to 25 percent, while about 13 percent of them would be willing to pay more than 35 percent premium for safer food products. Results have revealed that factors like individual's income, family dimensions, environmental concerns and wholesome diet, besides, consumer's awareness of safer food product's characteristics significantly increase their willingness to pay a premium for safer food. Furthermore, females would be willing to pay a higher premium, and those who have people with special circumstances in their family significantly would be willing to pay a higher premium price for these products.