A Global & Analytical Willingness-to-Pay Elicitation Methodthe Case of the Corporate Social Responsibility Attribute for Wine

Abstract

This paper develops a willingness-to-pay elicitation method that combines the strengths of choice experiments and experimental auctions. While these tools are standard for estimating consumer values of goods and their attributes, they tend to produce dissimilar results since their methodological discrepancies may trigger distinct types of behaviour. Based on Norwood and Lusk's (2011) calibrated joint auction method, Global & Analytical's willingness-to-pay elicitation method supplements it with two individual measures of willingness-to-pay through auctions, one derived from an initial holistic approach and the other after assessing the relative importance of the attributes comprising the good. We applied this method to the wine market, and in particular to the question of how consumers value the Corporate Social Responsibility attribute. We show that while analytical assessment leads to reduced willingness-to-pay for wine, the marginal willingness-to-pay for CSR increases relatively to the other attributes.

Keywords: Experimental auctions, Choice experiments, Willingness-to-pay, Product attributes, Organic, Corporate Social Responsibility (CSR), Wine market