Consumer Expectations for Geographical Origin: Eliciting Willingness to Pay (WTP) Using the Disconfirmation of Expectation Theory (EDT)

ABSTRACT

This study explores the impact of geographical origin in consumer expectations. Willingness to pay (WTP) for geographical origin was measured in three different information conditions (blind, labeled, and both blind and labeled) using an open ended technique of contingent valuation (CV) in the framework of expectations-disconfirmation theory (EDT). The results from the EDT show that a product with a positive reputation and highly preferred by the consumer is losing continuously the premium price paid for it. The decrease of the WTP in full information condition for the most preferred origin is probably due to the lowered consumer expectations and to the damages of the good image as a result of unfair competition, usurpation, and the misappropriation of the name. Geographical indications (GIs) may offer a solution to these problems by preserving the predictive value of origin information, maintaining high consumer expectations, and also preserving the good reputation of the product.

KEYWORDS:

• Contingent valuation
• disconfirmation
• expectations
• GIs
• origin
• WTP

Notes

¹ In Albania, as an aspirant country for EU membership, this issue is covered by the Albanian legal framework regarding Trademark: Law No. 9779, dated 17.7.2007 on “Food Security” Law No. 9902, dated 17.4.2008 on “Consumer Protection” and Law No. 9947 dated 7.7.2008 on “Industrial Property.”

² Prices are often listed in the different options of product attributes in conjoint analyses.