Willingness to Pay for Environmental Practices: Implications for Eco-Labeling

Consumer survey data, collected in former West and East Berlin after the unification of Germany are used to address the issue of willingness to pay (WTP) for foods produced with techniques consistent with environmental stewardship, showing differences in the WTP between residents of the two former German states attributed to area of residence.

Abstract

Consumer survey data, collected in former West and East Berlin after the unification of Germany are used to address the issue of willingness to pay (WTP) for foods produced with techniques consistent with environmental stewardship. Results show differences in the WTP between residents of the two former German states attributed to area of residence. Residents of eastern city districts were generally less willing to pay a premium for foods produced with environmental-friendly methods which suggests that marketing of such foods will be more successful in western districts, unless educational efforts can be used to bridge the gap in the stated WTP. (JEL Q28)