Agricultural Economics and Development

Agricultural Economics and Development

Evaluating the Preferences of Organic Tea Consumers in Tehran Based on the Hypothetical Bias in the Choice Experiment

Document Type : Original Article

Authors
E. Pishbahar 1
H. Mahmoudi 2
B. Hayati 3
1 Corresponding Author and Associate Professor, Department of Agricultural Economics, Tabriz University, Tabriz, Iran
2 PhD Student in Agricultural Economics, Tabriz University, Tabriz, Iran
3 Professor, Department of Agricultural Economics, Tabriz University, Tabriz, Iran
10.30490/aead.2020.121577
Abstract
Considering the hypothetical bias in the choice experiment is known as a traditional hypothesis in literature of the subject. But how to apply the methods of reducing the hypothetical bias is still a controversial issue among researchers. Considering the hypothetical bias, this study suggested further evidence regarding the preferences of organic tea consumers in Tehran city of Iran. The data and information needed for this study were obtained through the questionnaires completed randomly by 405 individual consumers in 2016. The choice experiment method and the logit model were used to survey the preferences of organic tea consumers in three groups. The study results showed that for the three different groups of base (without considering the hypothetical bias), cheap talk, and honesty priming, the average amounts of willingness to pay for the attributes were estimated 116080, 274940, and 186410 IR Rials, respectively, indicating that the application of hypothetical bias mitigation techniques would cause a reduction in the bias and more realistic willingness to pay of the consumers. With respect to the consumers’ high willingness to pay for the organic tea characteristics, it was recommended to raise the people’s awareness about the benefits of organic tea, resulting in an increase in demand of the product and the health in community as well.
Keywords
Kruskal-Wallis Test
Stated Preference
Cheap Talk
Conditional Logit
Honesty Priming
Tehran (City)
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