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Econometric analysis of British consumers' willingness to pay for Syrian organic olive oil

Majar, R. A. (2018) Econometric analysis of British consumers' willingness to pay for Syrian organic olive oil. PhD thesis, University of Reading

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Abstract/Summary

In Syria, as in other Mediterranean countries, olive tree cultivation occupies the number one place among fruit trees. Syrian olive oil has the comparative advantage for this product, this gives the opportunity to export the olive oil to the UK market. Recently, the worldwide demand for organic olive oil has expanded rapidly and has acquired a larger share of the market, especially in regard to issues relating to personal health, food safety concerns, and food quality. The study investigated the preferences of British consumers towards organic olive oil in general and Syrian organic olive oil in particular. For this purpose, two qualitative methods which include focus group discussion and verbal protocol analysis have been conducted. In addition, data was collected through an online survey from British respondents in the UK. The stated preference technique is used for a series of hypothetical scenarios presented in Choice Experiment. Consumers were asked to make trade-offs between changes in the levels of a range of attributes. Discrete choice model based on random utility theory helped to evaluate willingness of pay a price premium for organic olive oil and other attributes of product. Mixed Logit, Probit and Ordered Probit Models were employed to analyze CE outcomes using the Bayesian econometrics approach. Three model specifications of the standard mixed logit model were included in terms of scale heterogeneity of variance, attribute non-attendance and importance ranking of attribute. This study sheds the light on the constraints and the opportunities for Syrian organic olive oil in relation to domestic and international markets, with particular focus on the export potential to the UK. It was found that Syrian olive oil faces intensive competition from European companies that have a high reputation for the excellent quality of their olive oil. Syrian olive oil is a new product that has been introduced recently in the international market. It, therefore, requires substantial marketing and promotional support to garner consumer acceptance. Syrian farmers were inexperienced in using advanced olive oil extraction methods. These constraints could reduce the potential for Syrian olive oil exports. This research sheds the light on the potential role of the Syrian government and decision makers to help and encourage Syrian farmers to move to organic methods in olive sector. The study found that both organic (and non-organic) olive and olive oil have been promoted by the Syrian government as a suitable income source for Syrian farmers. Syrian promotion policies have covered into two parts; the first is related to direct promotion policies such as subsidies, loans and grants. The second is related to indirect promotion through foreign organizations and projects in collaboration with the government. Results revealed that attribute non-attendance is a dominant behaviour in CE. Findings showed that British people prefer organic olive oil in general and they are willing to pay for this attribute in order to be assured of health and safety food products. Consumers were unwilling to pay a price premium for Syrian organic olive oil. Results revealed that some respondents do not recognise that they use price as a cue of quality, or they have adopted some other form of heuristic the nature of which is unclear.

Item Type:Thesis (PhD)
Thesis Supervisor:Balcombe, K.
Thesis/Report Department:School of Agriculture, Policy and Development
Identification Number/DOI:
Divisions:Faculty of Life Sciences > School of Agriculture, Policy and Development
ID Code:85365
Date on Title Page:2016

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