Consumers’ valuation of a biofortified crop: Evidence from a laboratory experiment

Abstract

Malnutrition among women of reproductive age and children remains one of the major issues in developing countries, particularly zinc deficiency. Zinc deficiency hinders cognitive and physical development in children as well as adults. This study utilized a non‐hypothetical laboratory valuation experiment to analyze whether positive information about biofortified rice affects consumers’ valuations of biofortified as well as non‐biofortified rice. Specifically, we designed a within‐subject experiment based on Becker‐DeGroot‐Marschak (BDM) auction mechanism to compare consumers’ valuations of zinc‐biofortified and popular non‐biofortified rice varieties before and after exposure to information about the health benefits of zinc‐biofortified rice. We conducted our experiments in randomly selected four districts of Bangladesh, and a total of 134 consumers participated in our study. Results reveal that consumers assign a significant premium to zinc‐biofortified rice when they receive information about zinc‐biofortified rice and its health benefits. Intriguingly, positive information about zinc‐biofortified rice negatively affects the valuation of non‐biofortified rice varieties, suggesting negative spillover effects. Moreover, our results also identify that both the information provision and labeling are important to increase consumer demand for zinc‐biofortified rice.