Consumer willingness to pay for the colour of cooking oil: A comparison of rural and urban consumers' in Tanzania
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Date
2020
Authors
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Journal ISSN
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Publisher
Sokoine University of Agriculture
Abstract
Colour is considered an important parameter consumers take into account during product
evaluation. However, this attribute may be lost or altered during processing of the product.
Sunflower is one of the Tanzanian priority crops under the Agricultural Sector
Development Programme Phase Two (ASDPII). To ensure food safety, it requires that all
cooking oil sold in the market is double refined. This study is about consumer preferences
and Willingness to Pay (WTP) for the colour of cooking oil among rural and urban
consumers in a developing country. In addition to this, the study also determine the effect
of information about the level of refinement on the WTP for the colour of cooking oil.
Using the multiple price list format in eliciting consumers WTP, an interval regression
model was estimated. The study identified health considerations, naturalness and sensory
taste as the most important factors influencing consumer preference and WTP for the
colour of cooking oil. The study found that without information, the average WTP for dark,
light and very light cooking oil were TZS 3288/litre, TZS 3096/litre and TZS 2756/litre
respectively. It was also found that urban consumers reduced their WTP for dark oil after
getting information by 30.1% while rural consumers increased their WTP by about 7.2%
regardless. On the other hand, both rural and urban consumers increased their average
WTP for very light oil by about 26% when they received information. Furthermore,
estimates from the interval regression model revealed that very light-coloured cooking oil
was discounted in the absence of any information, but that changed once consumers were
exposed to information on the level of refinement. With information, urban consumers
were willing to pay significantly higher for very light cooking oil followed by light
cooking oil and dark cooking oil than their rural counterparts. The study recommended that
the government should embark on educating the population to allay fears that pushes them
away from very light cooking oil and also government can revisit its policy on double
refined cooking oil and make room for consumers who prefer unrefined due to health
concerns.
Description
Masters Thesis
Keywords
Cooking oil, Rural consumer, Urban consumer, Tanzania