Perceived quality and certification: the case of organic fruit

PERCEIVED QUALITY AND CERTIFICATION: THE CASE OF ORGANIC FRUIT by Antonella Vastola Abstract Consumers' attitude towards certification is twofold: there is a limited williness to pay a higher price for a certified product, but when they have to choose among different products, the most important element is the economic convenience, not the presence or absence of certification. This might be due to many reasons: consumers consider quality a luxury, or hey do not understand certification, and so on. It is therefore crucial to ascertain which is the combination of produce attributes consumers value best. This paper deals with quantifying the quality of organic produces, as it is perceived by consumers through conjoint analysis. Conjoint analysis is a multivariate analysis technique allowing the evaluation of consumer's preferences about different characteristics of a good. Its objective is to determine those combinations of attributes of a given good that "maximizes" consumer's utility and the relative importance of those attributes. Empirical analysis was performed by administering a questionnaire to a group of consumers of fruit and vegetables. We will consider the following attributes: price, certification by the Consorzio for Organic Produces Control, external aspect, information on production method. After processing responses, we will be able to define the importance attributed to produce certification by the consumers, and consumers' information about certification. A low price emerges as the most important single determinant of consumer's choices. We found that consumers are poorly informed about product certification, although they appear fairly knowledgeable about organic produces. Moreover, brand and store loyalty emerge as a main determinant of consumers' choices, much stronger than certification. We can therefore conclude that there is a demand for quality, but it goes largely unsatisfied because of asymmetric information problems. Moreover, the preference for low prices might drive high quality-high price producers out of the market. This situation might be improved in two ways: first, by increasing the contractual power of the agricultural sector against transformation and distribution sectors, to affect to a greater extent final consumption decisions. Second, public policy should aim to increase consumers' information and to carefully monitor the definition of quality standards and their enforcement.