Abstract
The main objectives of the present study are to assess Danish consumers’ Willingness to
Pay (WTP) for certified wood products, and to explore the link between this WTP and the
welfare economic value of the environmental benefits associated with the transition from
Conventional Forest Management (CFM) to Sustainable Forest Management (SFM).
The assessment of consumers’ WTP for certification is based on a mail-administered
survey of 376 randomly sampled Danish consumers using the Contingent Ranking Method.
Potential differences in WTP across product types are investigated by eliciting
respondents’ WTP for three different products: toilet paper, cutting boards and table tops.
Furthermore, the effect of information on WTP for toilet paper and cutting boards is
investigated by sub-sampling with two different levels of information about certification.
A thorough account is made of the different steps of the analysis leading to the derivation
of the final models. These are all in accordance with economic theory and intuition, and
have acceptable explanatory power. Despite this, the estimated WTP’s are found to
represent overestimates of actual WTP’s. Thus, the average sample WTP’s as a percentage
of the price of the products range from 57–97%. The results reveal no definite relationship
between the type or price of a product and WTP. Information was only found to be
significant for cutting boards, where increasing information was found to increase WTP
significantly.
The link between WTP for certified for wood products and welfare economic value of the
benefits associated with SFM is primarily explored on a theoretical basis, but it is also
discussed in the context of the empirical findings of the study. Certification may be
perceived to represent the benefits associated with SFM. Despite this, it is found that
estimates of WTP for certified products cannot readily be extended into an estimate of the
welfare economic value of the transition from CFM to SFM.
The weak complementarity between wood products and the environmental benefits
associated with certification impose limitations on individuals’ options for expressing their
preferences for certification and thereby SFM. Moreover, only that part of the benefits
entailed by SFM, which individuals perceive as complementary to wood products will be
reflected in their WTP. On a theoretical level, WTP’s for certification can therefore only be
expected to provide a lower bound estimate of the welfare economic value associated with
SFM. However, obtaining such a lower bound estimate is quite complex, since it requires
aggregation of WTP across total purchases of certified wood products.
Originalsprog | Dansk |
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Tidsskrift | D S T |
Vol/bind | 91 |
Udgave nummer | 2 |
Sider (fra-til) | 68-92 |
Antal sider | 25 |
ISSN | 0905-295X |
Status | Udgivet - 2006 |