Journal of Agricultural and Resource Economics
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Government rebates provide monetary incentives to encourage consumers’ adoption of eco-friendly technologies. Understanding how consumers perceive the value of rebate is crucial to policy makers. We use the smart irrigation system as an example and design choice experiments that present rebates in two formats: the total device cost and the cost consumers needed to pay versus the total device cost and the rebate value. We find that consumers discount the value of the rebate more when presented with rebate value. Additionally, the framing of incentives has a spillover effect on the perceived value of a seemingly unrelated attribute (i.e., water saving).
This study estimates distributions of consumer willingness to pay (WTP) for organic and animal welfare product attributes using the store scanner data and compares the results to existing experiment-based findings. We find that the WTP premium estimated for organic eggs is consistent with experimental results, while estimated WTP premiums for animal welfare attributes are significantly lower than experimental findings. The results suggest the importance of considering biases when estimating the price premium for animal welfare attributes in experiments. In addition, consumers are not always willing to pay premiums for organic products. Our results also show that WTP premiums are heterogeneous across store brands.
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