Consumer willingness to pay for cheese with a social sustainability attribute

ABSTRACT: The social dimension of sustainability is becoming very relevant on the consumer purchasing decision, especially in the food sector. This research analyzed the willingness to pay (WTP) of Chilean consumers for cheese with a social sustainability attribute using a double-bounded dichotomous choice format. Results showed that the WTP for a price premium depends on three variables: age, income and previous knowledge regarding social sustainability. The mean WTP is 7.5% over the average price of cheese; although, combining relevant variables and changing values over their range shows that firms can obtain up to a 12.9% price premium if they focus on younger and high income consumers that have a previous good knowledge about social sustainability practices. Additionally, this study presented a novel market oriented methodological approach for identifying and quantifying specific niche markets based on the WTP.

The effect of hedonic value, utilitarian value, and customer satisfaction in predicting repurchase intention and willingness to pay a price premium for smartwatch brands

The aim of this study is to examine the role of hedonic value (HV), utilitarian value (UV), and customer satisfaction (CS) in individuals' willingness to pay a price premium (WTP a price premium) and repurchase intention (RI) to smartwatches. This study is unique and important as it only deals with smartwatches, unlike other studies on wearable technology products that often focus on the general situation. The research sample includes smartwatch users aged 18 years and above. An online survey was used to collect research data from 420 people identified using the convenience sampling method. After checking the missing values, 401 valid surveys were retained for further analysis. Hypotheses were analysed using the Structural Equation Modelling. The research findings revealed strong relationships between HV and UV and CS. HV and UV were found to positively affect the CS. The results showed that CS also had a positive influence on both WTP a price premium and RI.

Effects of demand-side restrictions on high-deforestation palm oil in Europe on deforestation and emissions in Indonesia

Demand-side restrictions on high-deforestation commodities are expanding as a climate policy, but their impact on reducing tropical deforestation and emissions has yet to be quantified. Here we model the effects of demand-side restrictions on high-deforestation palm oil in Europe on deforestation and emissions in Indonesia. We do so by integrating a model of global trade with a spatially explicit model of land-use change in Indonesia. We estimate a European ban on high-deforestation palm oil from 2000–2015 would have led to a 8.9% global price premium on low-deforestation palm oil, resulting in 21,374 ha/yr (1.60%) less deforestation and 21.1 million tCO2/yr (1.91%) less emissions from deforestation in Indonesia relative to what occurred. A hypothetical Indonesia-wide carbon price would have achieved equivalent emission reductions at $0.81/tCO2. Impacts of a ban are small because: 52% of Europe’s imports of high-deforestation palm oil would have shifted to non-participating countries; the price elasticity of supply of high-deforestation oil palm cropland is small (0.13); and conversion to oil palm was responsible for only 32% of deforestation in Indonesia. If demand-side restrictions succeed in substantially reducing deforestation, it is likely to be through non-price pathways.

Spatiotemporal effects of proximity to metro extension on housing price dynamics in Manhattan, New York City

Investment in public transportation such as a metro line extension is often capitalized partially into housing values due to the spatiotemporal effects. Using housing transaction data from 2014 to 2019, this paper studies the Second Avenue Subway or Q-line extension in New York’s City’s Manhattan borough. Multiple metro station catchment areas were investigated using spatial autocorrelation-corrected hedonic pricing models to capture the variation of housing price dynamics. The results indicate that properties in closer proximity to the Q-line extension received higher price discounts. The effect varied by occupancy type and building form: condominiums experienced the highest price discount, while walk-up and elevator co-ops experienced a price premium. After controlling for location variations, we observed price discounts on the westside and price premiums on the eastside of the Q-line. Residential properties within 150 m west to the Q-line extension received the highest price discount post operation, while on the eastside, properties in the same proximity received the highest price premium. The anticipation effect varies by distance to metro extension stations, both before and after the operation of metro line extension. We discuss the disruption of metro construction on the housing market depending on housing type, location variation, and changes over time.

Price Premium Requirements for Growing Higher Quality Pine Sawtimber in Even-Aged Systems in the Southeastern United States

Intensive pine silviculture has become the dominant management paradigm in the southeastern United States. Although productivity has been substantially increased by the combination of cultural, silvicultural, and genetic advancements, wood quality is sometimes sacrificed in intensive silviculture. Extending the optimal rotation allows trees to grow more timber, which may result in the production of better quality sawtimber; however, landowners may require incentives to do so. We simulated loblolly, slash, shortleaf, and longleaf pine for growth and yield using the Forest Vegetation Simulator (FVS) to determine sawtimber price premiums landowners would require to offset the costs associated with delaying the final harvest by 10 to 30 years in even-aged systems. Required incentives increased with the length of harvesting delay beyond the financially optimal rotation age. On medium productivity sites, landowners would be willing to delay the final harvest by 10 years for sawtimber price premiums of $5.06/ton (20.47%) for loblolly, $5.34/ton (21.6%) for slash, $4.56/ton (18.45%) for longleaf, and $6.71/ton (27.14%) shortleaf pine, respectively. Harvest delays of 10 to 20 years were financially justifiable, whereas extensions exceeding 30 years were prohibitively costly for all species. Delaying the optimal harvest could benefit landowners by generating a premium price for their sawtimber while providing important ecosystem services. Study Implications The study findings will provide a baseline resource for forest landowners and managers who are interested in growing higher-quality and larger-diameter pine sawtimber to longer rotation ages to obtain a premium price. The results will also be helpful to primary forest product industries (e.g., sawmills) who prefer high-quality pine sawtimber and are considering offering a price premium for higher-quality pine sawtimber. Findings can be useful for those interested in managing forests for multiple benefits (e.g., timber production, wildlife hunting leases, carbon credits, and other ecosystem service incentives), as managing stands on longer rotations can provide the dual opportunities of receiving price premiums for higher-quality sawtimber while simultaneously generating revenue from nontimber benefits, which may help justify delaying the final harvest. Our findings can also help make policymakers and forest managers more aware of the minimum price premiums required to offset the revenue loss accrued by delaying the final harvest.

Anchoring and Asymmetric Information in the Real Estate Market: A Machine Learning Approach

Conventional wisdom suggests that non-local buyers usually pay a premium for home purchases. While the standard contract theory predicts that non-local buyers may pay such a price premium because of the higher cost of gathering information, behavioral economists argue that the premium is due to buyer anchoring biases in relation to the information. Both theories support such a price premium proposition, but the empirical evidence is mixed. In this study, we revisit this conundrum and put forward a critical test of these two alternative hypotheses using a large-scale housing transaction dataset from Hong Kong. A novel machine-learning algorithm with the latest technique in natural language processing where applicable to multi-languages is developed for identifying non-local Mainland Chinese buyers and sellers. Using the repeat-sales method that avoids omitted variable biases, non-local buyers (sellers) are found to buy (sell) at a higher (lower) price than their local counterparts. Taking advantage of a policy change in transaction tax specific to non-local buyers as a quasi-experiment and utilizing the local buyers as counterfactuals, we found that the non-local price premium switches to a discount after the policy intervention. The result implies that the hypothesis of anchoring biases is dominant.

RESALE OF GREEN HOUSING COMPENSATES FOR ITS PREMIUM PRICING: AN EMPIRICAL STUDY OF CHINA

ABSTRACT Green housing reduces resource consumption and protects the ecological environment. Sustainable buildings and construction have gained increasing attention in the last decade. Many empirical studies have confirmed that green housing imposes a price premium at the presale stage. The high price could be a concern that prevents homebuyers from purchasing green buildings. However, there is a lack of empirical evidence on whether the premium pricing could be compensated for by the resale price. To address this gap, this study establishes a hedonic regression model to estimate the price premium of green housing at the resale stage. The results show that green housing certified with the Chinese Green Building Label (CGBL) offers a 6% price premium compared with non-green housing at the resale stage. The results also show that green housing with a higher level of green certification, e.g., the 3-star CGBL, provides a greater price premium at resale. The findings indicate that home-buyers can obtain financial compensation for the high cost when purchasing a green home. Our findings also indicate that the price premium for reselling a green home is not always enough to compensate for the purchase cost in different cities. Policy recommendations for government promotion of green housing are also discussed.