Habitual Choice Strategy, Poverty and Urban Consumer Demand for Biofortified Iron Beans in Developing Countries: An Application of Random-Effects Double Hurdle Model

Type Working Paper
Title Habitual Choice Strategy, Poverty and Urban Consumer Demand for Biofortified Iron Beans in Developing Countries: An Application of Random-Effects Double Hurdle Model
Author(s)
URL https://www.researchgate.net/profile/Adewale_Oparinde/publication/281592684/links/55ef35d708aef559dc​44c0fe.pdf
Abstract
The increasing urbanization process in developing countries creates current and future
challenges for the global food system to deliver high quality nutritious foods and provide
equitable access for the urban poor. In this paper we examine the role of habit, poverty and
information in urban consumer demand for nutritious foods in the context of biofortified iron
beans as a public health intervention in Africa. We used an experimental auction technique to
elicit consumer willingness to pay (WTP) for the nutritional value of iron beans and a
random-effects double hurdle econometric approach to identify the magnitude of treatment
effects. The provision of information on the nutritional value of iron translates into significant
premiums for the iron bean varieties. Hypothetical bias is significant in the consumer WTP.
An elimination of participatory fees, which is commonly used in experimental auctions
provides an alternative practical approach of mimicking market realities in the field and of
identifying hypothetical bias in auction bids. Results suggest that poverty plays a significant
role in consumer demand, thus it has a potential to widen the access gap for iron beans in
urban areas in the absence of an equitable pricing system.

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