Understanding consumers' ornamental plant preferences for disease-free and water conservation labels

Abstract

Product labeling is increasingly used as a tool to differentiate products with public and private benefits that cannot be readily evaluated by a consumer at the time of purchase. Our research investigates how a labeling program may be applied in the sale of ornamental plants to address two key issues; plant disease and irrigation water use. A choice modeling survey was utilized to estimate consumers' willingness to pay a premium for six ornamental plants with disease-free and/or water conservation certification labels. The results of the mixed logit models show consumers are willing to pay a premium for plants certified as disease-free and/or produced with water conservation practices. The results strongly suggest producers can recoup some of the costs of implementing water conservation measures such as water recycling and disease control measures amid regulatory and drought concerns. Our research also investigated consumers' preferences for multiple third party certifying authorities and whether preferences for the labels varied among consumers. The results showed ornamental plant consumers did not reveal a preference for a particular certifying authority. The results are mixed as to whether willingness to pay for the labels varies among respondents. We show willingness to pay does vary among respondents for three of the plant models indicating preference heterogeneity.