The role of information in consumer preferences for sustainable certified palm oil products in Germany

by Christoph Richartz, Awudu Abdulai

Food products are often subject to information asymmetries, which are commonly supposed to be reduced by labels and certifications. However, as the number of labels increases, consumers tend to get confused, bored or impatient and stop using them to make product choices. This study uses data from a discrete choice experiment, conducted in Germany, to analyze consumers’ preferences and willingness-to-pay (WTP) for sustainability indicators on products that contain palm oil as an ingredient. Since information is crucial to the assessment and awareness of, or attendance to, labels on consumer products, this study assesses the effect of factual information on preferences as well as attribute-processing strategies. We use a hybrid latent variable model that allows us to jointly examine the response to the stated choice component and the responses to attribute processing questions, thus capturing attribute non-attendance (ANA) to specific labels while controlling for heterogenous preferences. Our results reveal that the attribute ‘organic’ receives the highest monetary valuation in the overall sample as well as in the information intervention, and the no-information intervention groups. The results also show that providing additional information tends to change consumers’ non-attendance patterns as well as WTP values. In particular, the information intervention tends to increase consumers’ WTP and decreases their ANA for sustainability-indicating attributes. The findings suggest that the attribute ‘organic’ has the potential to be ranked highest across the entire latent variable structure, making it the most promising attribute for promoting sustainable palm oil use across consumer groups.