Community Supported Agriculture and Preferences for Risk and Fairness

We aim to elicit consumers’ preferences for attributes of consumer supported agriculture (CSA) contracts and their determinants, especially risk and fairness preferences. We combine two incentivized field experiments with a stated choice survey. Risk preferences are structurally-elicited from several binary lottery choices and fairness preferences from a modified dictator game. We use a stated choice survey to determine consumers’ preferences for three attributes of CSA contracts: duration, loss in basket size due to production risks and price change. We face-to-face interviewed 162 CSA members. In line with fairness theory, we find consumers are averse to advantageous inequality (AI) toward CSA and non CSA farmers and averse to disadvantageous inequality (DI) toward non CSA farmers; but, we also find evidence of DI seeking toward CSA farmers. In the stated choice survey, we find consumers prefer longer contracts and that it is risk-driven rather than fairness-driven. As expected, consumers exhibit a dislike for losses and for share price increases. We find a high willingness to pay to avoid losses. High AI averse consumers tend to be less sensitive to losses. High DI seeking consumers tend to be less sensitive to losses and price increase.

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Conference Paper/ Presentation
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JEL Codes:
C93; D63; D81; Q18

 Record created 2017-04-01, last modified 2017-04-26

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