Selected paper at the 2002 AAEA-WAEA Annual Meeting
Demand for Credence Characteristics in Beef
Jukka Kola & Terhi Latvala
Department of Economics and Management
University of Helsinki, Finland
The aim of this study is to evaluate both qualitatively and quantitatively the value of new information
about and the information systems set for credence characteristics of beef. Economics of information is
our theoretical framework. The quantitative approach focuses to measure the ex ante value of credence
characteristics, and the method of contingent valuation is applied for this purpose. Results indicate that 59
% of Finnish consumers are willing to pay more to get information about safety and quality of beef
products. Consumers are most concerned with diseases caused by food of animal origin. Genetically
modified organisms (GMOs) are not considered as the most hazardous risk factor in food products.
However, if the beef products contain GMOs used in animals, then consumers also start requiring
Key words: beef, information, credence attributes, contingent valuation, willingness to pay
Recent food crises in Europe have raised public concerns of the quality and safety of food. The problem is
that consumers cannot be sure of quality of products when they make their purchasing decisions.
Especially in meat markets the significance of information and knowledge is emphasised, because
consumers often do not know prior to, but often also after, the purchase of meat whether it is of good or
poor quality in terms on many quality attributes, safety in particular. Consumers’ increasing concern
towards food safety issues has increased the demand for quality attributes. Most quality properties of food
products can be considered as credence characteristics as their quality cannot be inferred before, and
sometimes not even after the purchase (Darby and Karni 1973; Caswell and Mojduzska 1996).
The phenomenon of imperfect and asymmet