Consumer willingness-to-pay for food safety in Taiwan: A binary-ordinal probit model of analysis

A probit model for whether or not consumers are willing to pay a premium fo r hydroponically grown vegetables (HGV) is estimated jointly with an ordere d probit model analyzing the magnitude of such premiums for consumers who w ould pay them. Results of the Joint estimation and the conventional single equation ordered probit model were presented for comparison Unlike the sing le equation approach, the joint estimation allows the flexibility of parame terizing separately the probability and level of premiums that a consumer i s willing to pay for a safer food. The results show that family health stat us and household income ant the most important and significant factors that deter mine the amount of premium a consumer Is: willing to pay for HGV, Ho wever they are insignificant in predicting the likelihood of a consumer's w illingness-to-pay a higher price, in addition, marginal probabilities were calculated to assess the influence of various socioeconomic and attitudinal variables on the likelihood that a consumer would be willing to pay a prem ium for HGV and the additional amount of premiums.