4/28/2015
If You Don’t Spray, Will They Pay?
Heidi Wollaeger, Kristin Getter and Bridget Behe
In the first article in this series, we presented data from a nationwide online survey that evaluated consumer understanding of ornamental pest control methods. We found that of the alternative production practices presented to the survey respondents, bee-friendly production practices were the best understood, while neonicotinoid-free production was the least understood. In addition, we also found that the most important plant characteristics in considering a plant purchase were: 1) the plant had very little plant damage; 2) the plant had no insects on it; and 3) the plant had no pesticide residues on the leaves.
In this article, we present consumers’ willingness to pay (WTP) a premium for neonicotinoid-alternative practices. As explained in the first article, we conducted a nationwide online survey to better understand consumers WTP for traditional, neonicotinoid-free, bee-friendly or biological control pest management practices of several types of floriculture crops. The survey responses were collected in May 2014 and a total of 3,082 U.S. consumers participated. In addition to the WTP questions, plant purchasing behavior and demographic information was also collected.
Figure 1.
An example of one of the 16 pictures shown to participants asking about their willingness to purchase this plant at a given price and production method. In this case, a 4-in. geranium with a price ($3.49) and an alternative pest management practice (“grown bee-friendly”) was shown. For all the species, prices and production practices shown to participants, see Table 1.
Each WTP question was posed by showing the survey participant a picture of the floriculture product with text of the price and a description of the greenhouse pest management production practices (Figure 1). The consumer was then asked, “How likely would you be to purchase this plant?” and asked to respond using a scale of 1 (very unlikely) to 5 (very likely). Conjoint analysis (a statistical tool) was then used to assess consumer response to three different product categories: indoor or outdoor flowering plants marketed in 4-in. containers or outdoor flowering plants marketed in 12-in. hanging baskets. Within each of the product categories, there were three attributes: plant species, price and method of production (Table 1). We utilized four different plant species in each category, with four prices and four production practices (grown using bee-friendly insect management, grown using beneficial insects, grown using no neonicotinoid insecticides and grown using traditional insect management). The prices were chosen based on common price points for similar products in 2013.
Of the 3,082 participants, 65.1% (2,002) had made a plant purchase in the last 12 months. These plant purchasers (PP) were compared to those participants who did not purchase plants in the past year (NonPP). PPs average age (53.8 years) was slightly older than NonPPs (52.8 years). More PPs were female (57.5%) compared to NonPPs (51.1%), were more educated (59.7% vs. 53%) and had a higher household income in 2013 (52.9% vs. 35.1% earned $60,000+).
The resulting part-worth score from the WTP analysis is simply a numerical scoring of consumer preferences amongst all attributes and levels. A higher number indicates that consumers prefer, and were more likely to purchase, that particular attribute over lower-valued options. High positive values indicate a strong positive preference, high negative values indicate a strong negative preference and values near zero indicate a more neutral preference.
And the Survey Says …
For indoor 4-in. flowering plants and 12-in. hanging baskets, both PPs and NonPPs equally valued lower prices to higher prices (i.e., no statistical differences between PPs and NonPPs; Figures 2 and 4). However, for outdoor 4-in. flowering plants, PPs were more willing to buy lower-priced plants than NonPPs. They were also less willing to pay for higher-priced plants (Figure 3). Perhaps PPs know a good price (unlike the NonPPs) when they see one or perhaps PPs purchase more outdoor plants than NonPPs and so may be more price sensitive.
We didn’t provide the survey participants with any definitions or explanations of terms used in the study in order to deliberately force them to use their own knowledge and perceptions. Among the four insect control methods, the “traditional” insect control method was preferred least for all consumers across all three plant types (Figures 2, 3 and 4). In the case of the indoor 4-in. pots (Figure 2), PPs felt much more negatively about “traditional” insect control and five times more positive about “bee-friendly” insect control than NonPPs. Both PPs and NonPPs were rather neutral about using “beneficial insects” as an insect control strategy or a “neonicotinoid-free” strategy. We conclude from these findings that the use of the term “bee-friendly” will be of the greatest value to the retailer because it had the highest positive part-worth score.
Of the species shown to participants in this study, poinsettias had a very low WTP and mums a high WTP for indoor 4-in. pots for both PPs and NonPPs (Figure 2). For outdoor 4-in. pots, both NonPPs and PPs discounted coreopsis and geranium with a low WTP, but NonPPs felt much more negatively about geraniums than PPs. Petunias had the highest WTP for both PPs and NonPPs. For hanging baskets, all participants had a very negative WTP for geraniums and a very positive WTP for mixed-species baskets (Figure 4). This gives us some insight about which plants were preferred more or less over others in the same set. While this wasn’t a primary purpose of our study, it does give producers and retailers some additional information about consumer preferences among those sets of plants.
In addition to ranking product attributes within each price, production method and species, we also generated an overall importance score. This showed us indirectly how important each attribute was to the study participants. The importance score is always positive and higher scores mean that particular attribute is more important than lower-valued scores. There were no differences between PPs and NonPPs in importance scores within a given attribute for all three plant types, so all consumers are shown together in Figure 5. For indoor 4-in. flowering plants and 12-in. flowering hanging baskets, consumers placed the most importance on the plant species, followed by production type (insect management strategy). Price was the least important attribute. For the outdoor 4-in. flowering plants, all attributes (price, production type and species) were equally important. So, in general, given only these three pieces of information about the plant, consumers reacted similarly to the information and the method of insect control was less important than the plant type, but more important than the price.
Summary and Conclusions
In this study, we sought to better understand consumer preferences for pest management practices of floriculture crops. We concluded that marketing plants with the term “bee-friendly” would have the greatest impact on plant purchases because it had the highest scores. The terms “neonicotinoid-free” and “traditional insect control” were discounted by consumers, meaning that those words detracted or reduced the perceived value of the plants. The term “bee-friendly” was up to five times more valuable to those respondents that had bought a plant in the last 12 months compared to those who had not. Therefore, if ornamental plants are labeled with production practice, consumers will most likely value the term “bee-friendly” more and may discount products labeled “neonicotinoid-free.”
GP
Heidi Wollaeger is an educator with Michigan State University Extension, Kristin Getter is an outreach specialist at Michigan State University and Bridget Behe is a professor of horticultural marketing at Michigan State University.