The impact of honey fraud information on the valuation of honey origin: Evidence from an incentivized economic experiment

Abstract

While the adulteration or mislabeling of products as honey, or honey fraud, is a major concern for industry and regulators—leading to a burgeoning research literature on documenting characteristics of authentic, place- specific honey and developing new methods of detecting honey fraud, there is little evidence about the impact of honey fraud occurrence on consumer preferences. Studying consumer response to honey fraud is complicated by the unpredictable nature of detection of fraud and consumer exposure to information about fraud, which makes consumer experiments a valuable tool for understanding consumer response to honey fraud. In this binding valuation experiment, we examine consumer willingness to pay for four types of honey before and after exposure to honey fraud information (versus a control group): imported, domestic (US), local (Lincoln, Nebraska), and organic (no origin specified) honey. When consumers do not have information about honey fraud, they do not value US honey any more than imported honey, though they are willing to pay a premium for both organic and local honeys. When consumers read information about honey fraud, their valuation of imported honey decreases significantly—by over 20%. Valuation of the organic honey also decreases, though by a smaller amount (4%). On the other hand, valuation of both US and local honey increases. The combined effect of the decreased valuation of imported honey and increased valuation of US-produced honey yields a significant in- crease in the premiums that consumers are willing to pay for US and local honey over the imported honey. The results suggest that increased consumer awareness about honey fraud may lead to stronger preferences for honey produced in the US.

Read the Article