The impact of information on willingness-to-pay for bison

Abstract

The bison industry has limited resources for increasing market share. Exploring how consumers react to information about bison and discovering what people know about bison is important to determine the most efficient way to increase market share and ensure the sustainability of the bison industry. This thesis examines the impact of three different information treatments on willingness-to-pay for bison. The three treatments are a nutritional comparison chart of negatively-perceived nutrients, a bison taste testimonial from a chef and a statement concerning the absence of growth hormones and antibiotics in the processed bison product used in the research. The hypothesis tested is that nutritional information about bison would elicit the greatest increase in willingness-to-pay for the processed bison product. A random nth-price auction was conducted in December 2002 in Guelph, Ontario with 57 participants to elicit willingness-to-pay values for the processed bison product. Participants’ initial bids for the processed bison product were elicited without being given any information and a second round of bidding was conducted once participants had reviewed an information treatment. The mean difference in the bids between round two and round one are $0.221 for the nutritional comparison treatment, $0.210 for the taste testimonial treatment and $0.185 for the natural aspects treatment. ANOVA results indicate no statistically significant difference between the mean difference in bids between the three treatments. Further analysis with a regression model using the difference in bids as the dependent variable, dummy variables representing treatment types and survey data for the other relevant independent variables, shows that the coefficient for the nutritional comparison treatment is not significantly different from zero. Therefore, the hypothesis that nutritional information about bison would elicit the greatest increase in willingness-to-pay for the processed bison product has been rejected. The other independent variables examined in the regression are not significant. This thesis does not clearly indicate which information treatment would be the most effective for the bison industry to utilize in a bison information campaign. However, each information treatment did increase the group mean willingness-to-pay so any information relevant to consumers about bison may be beneficial in increasing market share for bison products. Industry participants may need to work together to simultaneously increase awareness, distribution and consumption of bison products to ensure the sustainability of the bison industry.