Theoretical and practical issues of research on the consumption needs for safe foods in Vietnam using the willingness to pay model
ISSN 2588-1299
VJAS 2020; 3(3): 756-770
Vietnam Journal
of Agricultural
Sciences
Theoretical and Practical Issues of
Research on the Consumption Needs for
Safe Foods in Vietnam Using the
Willingness to Pay Model
Le Thanh Ha, Nguyen Van Phuong, Do Quang Giam & Tran
Quang Trung
Faculty of Accounting and Business Management, Vietnam National University of
Agriculture, Hanoi 131000, Vietnam
Abstract
Research on consumer needs for safe foods under the willingness to
pay (WTP) approach based on consumer behavior has been
performed widely and has contributed greatly to the development of
safe foods, assisted enterprises’ decision-making processes in
improving agricultural and food products, and provided orientation
to policymakers in improving public health as well as in fostering
sustainable economic growth. Some of the methods used for
measuring WTP for safe foods, such as contingent value (CV), choice
experiment (CE), and auction experiment (AE), have made
significant contributions to the evaluation of consumers’ WTP for
food safety. Moreover, the application of these models has helped to
estimate the effects of many factors such as demography, consumer
habits, continuation of food safety, individual characteristics,
promotion, and product attributes, etc., on the WTP for food safety.
The trend of safe food consumption in Vietnam has distinct
characteristics, some of which come from national cultural identities;
therefore, Vietnamese researchers may approach the empirical
studies on this issue all over the world in order to find proper methods
for studying consumer needs for safe foods in Vietnam.
Keywords
Received: June 16, 2019
Accepted: August 24, 2020
Willingness to pay, safe food, consumer need
Correspondence to
Introduction
ORCID
Le Thanh Ha
The process of choosing food for consumption is significantly
influenced by consumer consciousness in safety and nutrients (da
Fonseca & Salay, 2008). Food safety plays an important role in food
consumption decisions, and shoppers have a tendency to switch to
healthier diets (Radam et al., 2007). Consumers have started to
people’s health, which can change the consumption behaviors of the
buyers (Rimal et al., 2001). In China, some studies have shown
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that consumers are willing to pay for the
attributes of products which can improve their
trust in the safety of foods such as food safety
certificates from the government or certificates
from private organizations, labels with detailed
information, and traceability systems of the
products (Ortega et al., 2011). In Thailand, the
need for safe foods has also increased
dramatically, and quality and safety requirements
are emphasized in the consumption of fruits,
vegetables, and meat products (Wongprawmas et
al., 2014). Research on consumer demands for
safe foods is one of the most urgent research
topics which needs to be carried out in order to
develop sustainable agriculture and build
appropriate marketing strategies for businesses.
in Long Bien district, Ha Noi, Viet Nam, 65.9%
of respondents had bought safe vegetables, and
approximately 15-35% of them chose to
consume safe vegetables daily (Do Thi My Hanh
et al., 2017). In another study about safe
vegetable consumption in Northern Vietnam, a
majority (46.25%) of 40 households chose the
survey answer that they need to consume safe
foods (Nguyen Van Cuong et al., 2019). These
results indicate a positive sign for consumer
needs in research on food safety in
Vietnam. However, empirical studies in Vietnam
have mainly focused on safe vegetables and
seafood, and little attention has been paid to other
agricultural products. Hence, scientific research
on consumer needs for safe foods in Vietnam is
important. With the adoption of the WTP
approach to assessing consumer needs for safe
foods, research can be of paramount importance
for businesses, retailers, and policymakers to
propose policies for agricultural development in
Vietnam in the future. For the reasons
mentioned above, this study endeavored to
review the theoretical and practical issues of
research on consumer needs for safe foods in
Vietnam with the willingness to pay approach
concerning buyers. We aimed to provide an
overview of the WTP approach in research on
assessing consumer needs for safe foods and
discuss methods used for measuring consumer
needs for safe foods using the WTP approach.
Worldwide, many authors have used the
willingness to pay (WTP) approach to study
consumer needs for safe foods. Many previous
studies have approached the assessment of the
need to reduce risks in food consumption by
estimating WTP (the amount of food and budget
for consumption) for taxation or labeling the
biosafety certificates for the food products
(Travisi
&
Nijkamp, 2004). Safe food
consumption is impacted by a variety of
attributes, so the WTP price for safe foods is
achieved by the WTP for these attributes
(Kehagia et al., 2007). Research on WTP
essentially evaluates the level of consumer
satisfaction of using safe foods, and from that,
the producers and retailers can obtain insights
into safe food consumption and can access
available advantages to raise consumers' trust
(Misra et al., 1991). The equilibrium of the
market will be achieved if the price that
consumers are willing to pay for increasing the
safety of food is equal to the price set by
manufacturers and/or retailers, at which point
manufacturers can decide to produce more
(Wilcock et al., 2004).
Methodology
The article reviews various empirical journal
articles about the consumption needs for safe
foods and the willingness of consumers to pay for
safe foods. We have also referenced some
professionals’ opinions related to the willingness
to pay approach including methods for
measuring WTP and estimation models, and
some factors which affect the WTP of consumers
or buyers in order to discuss the application of
these methods in studies on consumption need.
In Vietnam, although controlling food safety
is a major challenge due to the complex
distribution of safe foods, consumers have a
tendency to choose safer and more nutritional
Overview of the WTP Approach in
Research on Assessing Consumer
Needs for Safe Foods
products (Mergenthaler et al., 2007). In fact, the
consumer’s need for safe foods has increased
significantly; for example, in research on
consumer willingness to pay for safe vegetables
Willingness to Pay (WTP)
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Theoretical and practical isssues of research on the consumption needs for safe foods in Vietnam using the WTP model
Given that most of the good studies are not
available in the market, the measurement of
consumer needs in the market presents some
difficulties. Assessing WTP is essential in
studying consumer need for new products, and it
is crucial to optimize the imperative price
policies (Martínez-Carrasco et al., 2015).
Previous studies have assessed consumer WTP
for products so as to set up impeccable strategies
to develop and complete products based on
consumer needs. Research on WTP is associated
with the theory about consumers’ buying
contain no pathogens, and are traceable) and
have a valid certificate issued by competent
authorities. In Vietnam, the issue of food safety
received early attention by the Vietnamese
government. In 1995, the Government of
Vietnam carried out a "safe vegetable" program
in response to improving food safety in Vietnam.
The Ministry of Agriculture and Rural
Development established the standards on the
manufacturing of safe vegetables to meet the
standards of the CODEX (Codex Alimentarius
Commission). In that program, the Government
endeavored to coordinate with local authorities to
promote "safe vegetable" brands to retailers and
consumers (Mergenthaler et al., 2009a). Since
then, the program has been raising concerns
about food safety to the government and society.
decisions
from
problem
identification,
acceptance of personal responsibility, readiness
for action, information searches, evaluation of
alternatives, and selection of products to
purchase (Figure 1) (Schifferstein & Ophuis,
1998). In case consumers decide to choose a
product, they accept and place value on the
product, which means they decide to consume
that product not at market price but intuitive price
(Horowitz & Mcconnell, 2003). WTP can be
measured by the amount of payment or
percentage of payment increment for a unit of
goods or an additional attribute of that good,
which can differ depending on the objectives of
each research study.
In 2008, the Vietnam Technical Board of
Standards (TCVN/TC/F5): Food Radiation and
Sanitation Group compiled the Vietnam National
Standard TCVN 5603:2008. The standard was
announced by the Ministry of Science and
Technology in order to replace the old Vietnam
National Standard TCVN 5603:1998 which was
issued in 1998. This is the current national
standard of Vietnam, completely equivalent to
the CODEX standard of CAC/RCP 1-1969, Rev.
4-2003. The standard sets out the general rules of
practice for food hygiene, which have been
recognized by the world as necessary to ensure
food hygiene quality. The Vietnam National
Standard TCVN 5603:2008 guides the entire
food chain from the initial stages to the final
consumption, and indicates how to inspect each
Safe foods
According to the 2010 Food Safety Law of
Vietnam, “food safety is the assurance that food
is not harmful to life and human health” (Pham
Hai Vu & Dao the Anh, 2016). Therefore, safe
foods must be foods that meet respective safety
standards (contain no plant protection residues,
Accepting
Problem
Willing to take action
personal
recognition
responsibility
Alternative
Choice
Search
evaluation
Figure 1. Model of consumer behavior theory (Schifferstein & Ophuis, 1998)
Vietnam Journal of Agricultural Sciences
758
Le Thanh Ha et al. (2020)
stage of the processing cycle, making
recommendations on basic solutions based on
HACCP (Hazard Analysis and Critical Control
Points) to enhance food safety. This general
principle standard is a firm foundation for
ensuring food hygiene in Vietnam. On this basis,
Vietnam built a separate regulatory system of
sanitary practice in an appropriate manner. To
control food hygiene and safety, until now,
Vietnam has issued a range of national standards,
which have been applied to different food
groups. Safe food standards raise the final food
quality, affect the internal organization of
manufacturers, and orient the supply chain
management. Moreover, the standards indirectly
influence the competition and policies for public
intervention to ensure that the food sold fulfills
the designed requirements (Hammoudi et al.,
2009).
Food Safety Law issued in 2010, the Vietnam
Government has issued a series of decisions and
resolutions relating to food safety requirements
for each group of goods like vegetables, fruits,
meats, etc. The People's Committees are
responsible for the local management of food
safety; they are responsible for controlling the
qualifications of food safety criteria in food
manufactories, food retailers and food service
agencies, street food sellers, local markets, and
others, and for the inspection and handling of
violations of food safety legislation in the
managerial areas (Vietnam Congress, 2010). The
food manufactories, food retailers, and
foodservice agencies are responsible for the
implementation of food safety qualification.
Consumption trends and consumer willingness-
to-pay for safe foods
There has been an increasing tendency in the
number of expenses related to safety factors in
food consumption needs in Vietnam (Figuié et
al., 2004). Vietnam consumers have been
spending 1.9% of their budget on safe foods
because they trust the sellers, and 0.3% of their
budget for their trust in formal certification
(Mergenthaler et al., 2009b). The WTP for safety
The management system of food safety in
Vietnam is carried out from the central
government to the local governments (Figure 2);
in which, three ministries, the Ministry of Health,
the Ministry of Agriculture and Rural
Development, and the Ministry of Industry and
Trade, are in charge of the nationwide
management of food safety. In addition to the
Management, inspection and hangding of food safety in national level M
Ministry of Health
- Food additives
- Processing support agents
- Bottled water
- Natural mineral water
- Functional foods
Ministry of Industry
Ministry of Agriculture and Rural
Development
- Cereals and salt
- Fisheries and aquaculture products
- Vegetables and fruits
- Eggs and raw milk
and Trade
- Wine and beer
- Drinks
- Dairy products
- Vegetable oil
-Products processed from
flour and starch
- Honey
- Genetically modified products
Local People's Committees are in charge of the management, inspection, examination, and
handling of violations of food safety legislations in the local level
Food manufactories, food retailers, and food service agencies
Figure 2. Management, inspection, and handling of food safety at the national level
759
Theoretical and practical isssues of research on the consumption needs for safe foods in Vietnam using the WTP model
factors in food is about 30% to 74% higher than
the market prices of conventional vegetables
(Mergenthaler et al., 2009a; Do Thi Ha Phuong
et al., 2017). Given a higher comprehension of
food safety certification and higher prices,
consumers would be willing to pay for 1 kg of
safe products compared to conventional products
(My et al., 2017).
production), and HACCP (Hazard Analysis and
Critical Control Points). However, food safety
certifications (such as VIETGAP, organic,
GLOBALG.A.P., and HACCP) are unfamiliar to
many Vietnamese consumers. For example, in
the study on Vietnamese consumers’ familiarity
with food quality certifications, more than 60%
of 500 study respondents were not familiar with
either GLOBALG.A.P. or HACCP standards,
and 30% of them claimed that they had "heard"
about these certificates, but they did not
understand what they were (My et al., 2017).
In Vietnam, many barriers have appeared to
limit consumers’ access to safe food
consumption, which can make it difficult to
increase safe food production over the country.
Firstly, consumer's access to safe food signage,
such as brand name or government certification,
is still restricted. Meanwhile, a majority of
consumers still trust in food safety signs. A
previous study focusing on safe food
consumption in Vietnam showed that 55.5% of
consumers trust in the quality of food sold at
supermarkets, 49.5% of them trust the food with
a reliable checkmark, and 42% of them believe
in food from prestigious brands, and they are
convinced by the assurance of the government
and official organizations about the quality and
safety of food (Vo Thi Ngoc Thuy, 2016).
However, barriers to safe food consumption
occur when consumers state that "they do not do
shopping in supermarkets", "cannot find the
quality checkmark", and "are afraid of buying
counterfeit goods” (Figuié et al., 2004).
Secondly, because the price of safe foods is
generally higher than their ability to pay, 68% of
consumers choose to buy traditional vegetable
products rather than safe vegetable products.
Consequently, many retailers do not sell safe
vegetables to replace conventional food (Van
Hoi et al., 2009).
The significant differences in food
consumption between rural and urban consumers
is also a current trend in food consumption
research in Vietnam (Hoang, 2009). The shifting
into a health concerned, environmentally-
friendly manner of living is the driving force for
sustainable consumption of the middle-income
class in urban areas (De Koning et al., 2015).
Urban consumers are also more likely to
understand safe food and food safety
certifications (Figuié et al., 2004). Safety
consumption trends are also being formed among
urban consumers. For sustainable consumption
purposes, consumers are willing to eat more
organic food, less meat, and more local foods,
and they prepare food with less waste and
minimized food storage in the fridge (De Koning
et al., 2015).
The
above
issues
are
important
considerations for the selection of proper
research methods as well as appropriate models
for assessing safe food consumption needs in
Vietnam. Different contexts and circumstances
require different methods and approaches;
therefore, researchers should select a suitable
method and model in accordance with their
particular purposes.
There are a number of factors affecting safe
food consumption in Vietnam, such as “food
safety certificates”, “clear traceability”, and
“supplier commitment”, that may significantly
impact the level of trust among Vietnamese
consumers in safe food (Van Hoi et al., 2009). In
Vietnam markets, there are several product
quality certifications such as VIETGAP (clean
Methods used for Measuring Consumer
Needs for Safe Foods Using the WTP
Approach
Methods for measuring WTP
agricultural
practices
in
Vietnam),
There are five standard methods for
measuring WTP, which are the contingent value
GLOBALG.A.P. (global clean agricultural
practices), organic (organic agricultural
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760
Le Thanh Ha et al. (2020)
method (CV), choice experiment method (CE),
auction experiment method (AE), menu-based
choice experience method (MBC), and conjoint
analysis method (CA). All of the above five
methods have been considered for the research of
food consumption in Vietnam.
knowledge about safe products, and level of risk
tolerance, etc. WTP can also be evaluated using
the CV method by the dichotomy method, in
which the questions for the interviewees require
the respondents to answer whether they are
willing to an additional amount of B1 for a safe
food. The respondents can answer yes/no, and if
yes, the respondents continue to answer
questions of whether they are willing to pay a
higher price for the safe food (B2) with the
answer to this question being yes or no (with the
conditional restriction B2> B1, and B1, B2,.., Bn
being the value range of money respondents are
willing to pay for safe products) (Travisi &
Nijkamp, 2004).
CV method
The CV method generally uses non-market
valuation to access WTP such as questionnaires
for consumers. This method has been widely
used in empirical research on consumer behavior
or consumption need to estimate WTP, but since
there is no market for safe foods, the direct
observations for monetary amounts that people
pay for safe foods cannot be obtained (Bozoglu
et al., 2019). Instead of a survey for consumption
habits, this method allows researchers to directly
ask consumers through survey questions about
their buying options: whether they would buy a
product or not, and at what price and quantity
(Carson & et al., 2001). The CV method is
commonly used in food studies, especially in
measuring WTP for safe foods (Radam et al.,
2007). The results of survey questions can be
used to implicate a direct economic interpretation
if the good to be valued is clearly explained, its
delivery to consumers is conceivable, and a
realistic expectation of payment was identified
(Carson et al., 2001). In CV, the WTP for a single
well-defined product is identified by asking
respondents to place an acceptable value on that
product (Mørkbak et al., 2011). The study by
Haghjou et al. (2013) made an effort to evaluate
the factors affecting the need for safe products by
the CV method. Their research conducted a trial
survey on 50 people before an official survey on
423 consumers. Haghjou et al. assessed
consumers' willingness to pay on a 6-point scale
(6-point Likert Scale): not willing to pay, willing
to pay less than 5% higher than traditional
product’s price, willing to pay 5-14% higher than
traditional product’s price, willing to pay 15-
24% higher than traditional product’s price,
willing to pay 25-34% higher than traditional
product’s price, and willing to pay 35% higher
than traditional product’s price. Their study
examined the explanatory variables for the
willingness to pay decisions, including
demographics, behavior, shopping habits,
CE method
In addition to the CV method, the CE method
was developed to estimate WTP for safe foods as
a broader approach of CV for food consumption.
CE respondents are asked to choose between a
number of a set of product characteristics. Then
the WTP of individual characteristics can be
evaluated (Mørkbak et al., 2011). Because safe
food gives credibility to some characteristics
which differ from conventional ones, the CE
method is based on the assumption that
consumers choose to buy safe foods by
comparing not only observable characteristics
but also unobservable characteristics. Consumer
WTP is an aggregation of WTP for product
attributes. Therefore, in the survey, consumers
are asked to choose among a number of products
which are associated with specific characteristics
(each particular characteristics is one product
attribute) such as safety, traceability, and
certificates, etc. (Gracia & De Magistris, 2008;
Wongprawmas et al., 2014). Consumption
decisions are made based on the degree of utility
gained from a series of consumption options, and
each
option
displays
some
product
characteristics in an attempt to keep a balance of
the product characteristics in order to optimize
utility. To minimize the bias in measuring WTP,
the role of cheap talk was mentioned. Cheap talk
can remind participants of some realistic issues
which can limit their options. The cheap talk can
warn consumers not to exceed their actual WTP
threshold in terms of income constraints,
consumer budgets, and product knowledge, etc.
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Theoretical and practical isssues of research on the consumption needs for safe foods in Vietnam using the WTP model
(Van Loo et al., 2011). Attributes to safe food
consumption can include the following
components: price, freshness, brand name,
traceability, government food safety certificates,
and certificates of other organizations (Ortega et
al., 2011; Van Loo et al., 2011; Wongprawmas
et al., 2014). The main criticism of CE is that
there are numerous choice sets. A WTP
questionnaire with a yes/no option for all
possible combinations for five different
characteristics will create a questionnaire with
(25)2 options or 1024 choice sets, which is not
feasible when conducting a survey. Thus,
fractional factorial design (Table 1) is often used
to deal with this problem (Ortega et al., 2011).
The fractional factorial model is designed to offer
some options with particular combinations of
product characteristics and then asks participants
their favorite choice options.
customers were willing to pay $0.70 more for
safer products. Fox et al. (1995) designed
experiences to apply the AE method to estimate
WTP in which participants were given the
options of consuming ordinary food without
payment or bidding to consume food with
additional safety ingredients. The screening
process to select individuals participating in the
experiments affected the estimated WTP value.
According to Fox et al. (1995), if there is a failure
in creating a strict set of criteria for selecting
participants, the estimated WTP value may be
higher than the real WTP value for safe products
(Martínez-Carrasco et al., 2015).
Menu-based choice experience method
This method was applied in some research
about the WTP for the attribution of food
products. By setting menus for the shopping
experience, the study collected the alternative
choices of participants. Based on a MBC
experience auction, the corresponding reactions
of consumers when product attributions change
are captured (Hou et al., 2020a). Generally, MBC
is a complicated procedure and expensive to use
(Hou et al., 2020b).
AE method
The AE method is rarely used, usually due to
limitations on the cost and time of research,
scope of the study area, and sampling. Therefore,
although this method is costly, the results are not
representative of the whole population
(Martínez-Carrasco et al., 2015). AE uses
empirical supermarkets and allows consumers to
choose products at the same price as they do in
actual shopping. The change in the information
listed about the safety of the products
corresponding of the risk of product consumption
is conducted in parallel with the change in price,
and then the willingness-to-pay is the average
price of the results from the trial. Hayes et al.
(1995) applied this method to evaluate WTP for
safe foods (sandwich products with safe and
quality ingredients). The research revealed that
Conjoint analysis method
CA provides numerous sets of products with
particular characteristics. Each combination is
known as a product profile, and then consumers
give a score to evaluate the level of preference
related to each combination of product
characteristics (Hou et al., 2020b). The issue that
occurs in this method is to reduce the number of
attributes of the products in order to manage the
number of combinations (Green & Srinivasan,
1978). Due to the profiles including sets of
Table 1. WTP questionnaire for safe food attributes
Option 1
Option 2
8
Option 3
Price ($)
Traceability systems
Government certificate
Certificate of private organization
Label
12
Yes
Yes
Yes
No
Not buy, not accept
product
No
Yes
No
No
I will buy (stick in O)
O
O
Source: Ortega (2011)
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762
Le Thanh Ha et al. (2020)
attributes of each product, we can derive discrete
measures of WTP for each attribute. The most
suitable number of attributes should not
exceeded 6 because at that point, the sample size
is still small, and the questionnaire can be
designed so that respondents pay attention to the
answers (Hou et al., 2020b). To get the effective
WTP measurements, CA and CE or AE have
been used by corporations to better understand
consumer preferences for food characteristics
(Darby et al., 2008; Imami et al., 2016).
independent samples (e.g. female/male and
buyer/non-buyer) in terms of attitudes towards
the safe foods (Sangkumchaliang & Huang,
2012). Although it is suitable for a simple
analysis of WTP, it is hard to estimate
appropriate WTP results through this method
because this method is primarily focused on
evaluating the differences of WTP between some
groups of consumers. Otherwise, discriminant
analysis cannot achieve the optimal results unless
participants were provided the definition of each
safe food without attempting to educate or
influence their purchase decision. This means
there is a requirement that questionnaires need to
be carefully designed to avoid influencing
consumer responses in respect of minimizing the
bias of information reflected in the consumer’s
behaviors (Rimal et al., 2001).
WTP estimation models
Recent empirical research on WTP used
different models for the estimation of WTP such
as the discriminant analysis, logistics regression,
combined model and filter design, and Heckman
two-step models.
Logistics regression model
Discriminant analysis model
Some studies have assessed customer
behaviors in purchasing safe foods and the
factors affecting those decisions based on
discrete choice theory. When studying WTP, the
variable Y denotes the choice of WTP, which
shows the consumers' WTP choices being either
0 (no WTP) or 1 (yes WTP). Data collected in a
survey are converted to binary variables for the
assumed results of 0 and 1, and the probability of
distribution for each variable of 0 and 1 is the
Bernoulli distribution, in which P (Y = 1) = π,
probability P (Y = 0) = 1-π, and π in the range
(0,1) is the probability of choosing to consume
the product. The purpose of WTP estimation is to
assess the impact of each variable on WTP. The
simplest case following a linear regression model
is E (Y | x) = π = β + β1x. The introduction of
binary and dummy variables in the study of
consumer behavior has given rise to limitations
in the application of linear regression in
quantitative analysis. First, estimating by linear
regression can give results of estimating the
probability of consumer choice which exceed the
range (0,1). Second, the correlation between the
independent variables and the probability of
choosing the product is not a linear correlation.
These two issues are appropriately addressed by
logistic regression (Fitzmaurice & Laird, 2015).
The simple logistic regression model is as
Some effective models of discriminant
analysis methods can be listed as radar diagrams,
descriptive statistics, and non-parametric tests.
Discriminant analysis is related to classifying
respondents into different groups. For example,
respondents of a sample could be divided into
three groups depending on consumption
behaviors with regard to alternatively grown
foods and reform foods. Respondents who can
buy both alternatively grown food and reform
foods would be referred to the first group,
respondents who cannot buy organic foods but
do buy reform foods would be referred to the
second group, and respondents who cannot buy
either of the two food types would be referred to
the third group (Schifferstein & Ophuis, 1998).
Radar diagrams can depict the purchase
behaviors
between
some
classified
characteristics of respondents: concern for their
own health, concern for environment protection,
knowledge of organic food, etc. Then, the
decisive factors influencing consumer purchase
decisions can be determined (Yin et al., 2010).
Descriptive statistics and non-parametric tests
can be used to determine the statistical
significance of the explanatory variables to
attitudes and behaviors toward safe food. The
non-parametric test enables users to analyze all
of the cases for the purpose of comparing of two
763
Log-log function: g(π) = log[−log(1 − 휋)
Theoretical and practical isssues of research on the consumption needs for safe foods in Vietnam using the WTP model
follows: g (π) = β0 + β1x, and the multivariate
logistic regression model has the form: g (π) = β0
+ β1x1 + β2x2 + β3x3 + ... + βnxn, in which, π is the
probability that consumers choose between (0,1),
while x1 ... xn are the independent variables
affecting the probability of choosing to consume
the product. The different models of logistic
deal with a series of interrelated relationships
among the numerous of factors.
Combined models and filter design model
Some research approached WTP by
combining the models based on filter design to
minimize deviations in analyzing survey data.
Obviously, the analysis of survey data based on
filter design can be performed by a probit
estimation model for binary variables. The filter
design was studied in estimating WTP with the
assumption that consumers make two decisions:
(1) whether they are willing to pay or not; and (2)
how much they are willing to pay (Huang et al.,
1999). According to behavior and decision-
making processing theory, consumers will decide
to buy safe food, and if they choose to buy, then
consumers will decide to buy at what price, or
decide how much to pay for safe products. So,
the filter structure consists of two dependent
variables d (d = 1 if they are willing to pay and d
= 0 if they are not willing to pay), and the
variable yj (yj = 1 if yj-1 * <y * <yj *; yi = 0), in
which (yj-1, yj) is the price range. The equation
has the following form:
regression are as follows:
휋
Logistic (logit) function: g(π) = log[
]
1−휋
Probit function g(π) = Ф-1(π) in which Ф is
the Gaussian normal distribution function
The logistic regression method mentioned
above is the simplest form. Furthermore, some
recent
researchers
studying
consumer
willingness to pay have used random parameters
logit (RPL) and multinominal logit (MNL). The
traditional conditional logit model (often referred
to as the MNL model) was proposed by
Mcfadden (1973) and is widely used to estimate
WTP, then it was upgraded to the mixed
multinomial logit model (MMNL), which can be
called the random coefficients logit (RCL)
model. This upgrade improved the model’s
ability to deal with more complex error
component structures. In the model, WTP cannot
be estimated as a fixed value but is represented
by a random distribution of WTP (Balogh et al.,
2016). WTP can also be estimated with RPL,
which limits three disadvantages of MNL by
allowing random taste variation and alternative
percept patterns, and correcting unobserved
factors (Alfnes et al., 2006). Furthermore, since
the WTP for the food attributes contributes to the
consumer’s WTP for a food, a model that can
estimate WTP for each attribute’s contribution is
necessary (Hou et al., 2020a). In empirical
research, MVP was used to access the WTP for
multiple choices of substitute attributes. The
MVP model is characterized by a set of
dependent variables and each equation was
considered to use the fixed set of independent
variables (Ngenoh et al., 2019). Generally, the
logistic regression model produces the higher
significant estimation for WTP in case of binary
and dummy variables used in models compared
to the linear regression model. However, this
method cannot incorporate factors analysis to
d = αX+εd and yj = βZ+εy; of which, εd,εy are
constants, and X, Z are the sets of explanatory
variables
The probability function is as follows:
Probability of events d =0: P(d=0)=
∫∝ ∫∝
푓(푒푑, 푒푦, 휃)=F(-αX, ∞, θ)
훼푋 훽푍
F(-αX, ∞, θ) is the cumulative distribution of
푓(푒푑, 푒푦, 휃)
Probability of events d=1: P(d=1) =
∝
푚 −훽푍
푗
−훽푍 푓(푒푑, 푒푦, 휃) 푑휀푑푑휀푦=F(αX, mj-βZ,
∫
∫
푚
푗−1
−∞
θ) - F(αX, mj-1-βZ, θ), of which m0, m1, …mn are
the list of options of the WTP variables and j
accepts the value from 0 to n.
The model makes estimates by the method
of maximum likelihood. Thus, the likelihood
function for the proposed models is as follows:
푁
푁
1−푑
푖
∏
∐
(
)
L
=
푖=1 푗=1 푃 푑푖 = 0
푃(푑푖 =
1, 푦푖푗)푑 푦 , of which i is the index of individual
observations, N is the size of the sample, and α,
β, θ are the parameter estimations.
푖
푖푗
Vietnam Journal of Agricultural Sciences
764
Le Thanh Ha et al. (2020)
The study of Huang (1996) was one of the
pioneering studies when analyzing safe food
consumption needs through two aspects of
consumer behavior: liking products and
accepting purchases. His research has built two
models to evaluate the factors that influence
consumers' preference for safe products and the
factors that influence consumer acceptance of the
safe product. The results showed that consumers
are interested in safe products, are interested in
limiting pesticides, and understand the
importance of quality control, nutritional
ingredients, and product price that affect their
preference for safe food. However, the
acceptance of consumption depends on the level
of education, family size, income, product prices,
product appearance, age, and income. However,
this research still has a limitation in answering
“how much consumers can consume for the
product they choose.” Heckman (1976)
introduced a two-stage regression estimation
model, which was first designed for cases where
consumption can be zero (Bozoglu et al., 2019),
so the process of consumer needs research will
be divided into two steps: (i) Step 1: identify
whether consumers are willing to buy the
product; and (ii) Step 2: if they are willing to buy,
how much are they buying? Asatryan (2004)
applied this model to study pork consumer needs
by assessing the influences of factors on safe
food purchase decisions (crop, diet as suggested
by doctors, gender, age, educational level, area of
residence, number of family members, and
families without members under 18) and factors
influencing the amount of food purchased (crop,
doctor's diet recommendations, gender, age,
region of residence, and number of family
members).
then the Lancaster consumer needs model can be
highly evaluated to analyze the WTP for safe
foods (Gracia & De Magistris, 2008). In the
Lancaster model, consumers select products as a
process
of
combining
complementary
characteristics, which can be known as the
attributes of products, to maximize usability. In
particular, the utility is measured by the
following function: Uij = Uij (z1, z2... zn) where zi
= aipi is the consumption attributed to
characteristic i, in which one is the consumption
volume and pi is the price of the product
consumed. The utility function is related to two
groups of impact factors, the observable group
such as the characteristics of the product, and the
unobservable group such as customer
preferences. The unobservable part is often
difficult to measure, so it is possible to write the
utility function of a safe food as follows: Uio = βio
zi + εio, where ε represents the effect of the
unobservable part. The utility function of a
conventional food can be written as Uic = βic zi
+ εic; in which, βio and βic are the estimated
parameters. Then, the probability of the WTP for
safe foods will be P(Yo) = P(Uio> Uic) = P(εio- εic
<βiozo - βiczo), assuming the following definition:
εi = εio- εic, βi = βiozo - βiczo. In addition, to explain
why consumers choose safe foods, the bivariate
choice model is used as follows: y*i = βizi + εi, of
which: y* is the unobservable variable which
represents the probability of a safe food
consumption option, zi is the explanatory
variable of the purchase decision, and y is the
observable variable, which is in relationship with
y* and can accept the values 0 and 1, if y=1: y*i
≥ 0 or εi ≥ - βizi ; Uio > Uic . Then, the probability
of the consumption frequency can be written as
follows: x*i = αidi + λi, of which: x* is the
unobservable variable, which represents the
probability of the safe food consumption
frequency, di is the explanatory variable of the
option of the safe food consumption frequency,
xi is the observable variable in the relationship
with x*, yi = 1, where x = 0 if the consumer is a
not regular safe food consumer, and x =1 if the
consumer is a regular safe food consumer, and εi
and λi are also accepted in N(0,1).
When studying food products, it can be seen
that the distinct characteristics of a product create
the differences among similar products and safe
foods have their own specific characteristics
which differ from traditional products. For this
reason, customers are willing to pay for these
differences, which include both observable
differences and unobservable differences (Gracia
& De Magistris, 2008). In such a case, it can be
assumed that consumers buy a product's
characteristics instead of the product itself, and
Generally, the combined models and filter
design increase the significance of WTP of
765
Theoretical and practical isssues of research on the consumption needs for safe foods in Vietnam using the WTP model
consumption need for safe food since the model
adds the selectivity of the sample into its
databases. Filter design can correct for zero
consumption cases and limits model bias
generating from sample selection by dropping
observations (Lanfranchi et al., 2019). However,
one disadvantage of this method is that numerous
variables selected into the model can make a
multidimensional problem, which is caused by
some variables being interconnected with others.
willing to buy in order to design appropriate
questions. Accordingly, many variables are
included in the models to assess the factors
explaining WTP for safe foods (Table 2).
Variables can be selected such as age, gender,
education level, knowledge of safe foods, health
concerns, environmental concerns, product
prices, product quality, taste, and color, etc.
Depending on the characteristics of each type of
safe food and geographic region, cultural factors,
and general consumer trends, etc., the proper
models are selected and applied appropriately.
Two methods which can be used to screen
variables are EFA (exploration factors analysis)
and SEM (structural equation modeling). EFA is
a multivariate statistical method designed to find
potential variables from observed variables,
based on the assumption that the observed and
measurable variables can be captured and laid
into latent variables. The number of samples
considered for this method is about 300
observations (Yong & Pearce, 2013; Janssen,
2018). SEM is a model used to verify the
suitability of a linear model of the explanatory
variables of WTP, and this model is used when
analyzing the interrelationships of the
Previous studies have shown that the factors
that explain WTP for safe foods can be grouped
into: factors related to food safety awareness,
health awareness, and human factors,
anthropology, individual characteristics, media
and promotion factors, and product contribution
factors (Capps & Park, 2002; Michaelidou &
Hassan, 2010; Liu et al., 2013) (Figure 3). WTP
research is derived from identifying whether
customers prefer safe foods; if they prefer them,
whether they will accept the consumption of the
safe foods; and if they accept consumption, how
much money are they willing to pay or the
amount they are willing to pay for the safe foods.
The studies can set the price range for the WTP
and the amount of the product that consumers are
P2
Pn
P1
Accept
WTP
Y
N
Prefer
Q2
Qn
Q1
N
N
-
-
-
-
-
Individual characteristics
Promotion and media
Product attributes
Demography
Factors influencing
a consumption
decision (WTP)
Annotate:
Y: Yes
N: No
Consumer behavior
P: Price
Q: Quantity
Figure 3. Model of assessing a factor’s influence on WTP
Vietnam Journal of Agricultural Sciences
766
Le Thanh Ha et al. (2020)
explanatory variables of WTP. The model can be
seen as an extension of the multiple regression
method. The technique allows the estimation of a
range of regression models, in which the function
is discrete but interdependent, with the ability to
contain a series of interdependent relationships
(layers). This technique may incorporate factor
analysis to explain the model structure or hidden,
unobservable factors, and then examine the
model structure. This technique is performed
before the statistical analyses are conducted, so it
is often used to test the model's suitability
(Michaelidou & Hassan, 2010).
Conclusions
The paper attempts to review the theoretical
and practical issues about the consumption and
needs for safe foods in Vietnam through the
willingness to pay of concerned consumers.
Table 2. Review of the explanatory variables of WTP for safe foods in empirical research
Groups
Explanatory
Age
References
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Individual
characteristics
Huang et al., 1999; Asatryan, 2004; Mørkbak et al., 2011; Haghjou et al.,
2013; My et al., 2017
Sex
Thompson & Kidwell, 1998; Huang et al., 1999; Asatryan, 2004; Gracia &
De Magistris, 2008; Haghjou et al., 2013; Ngo Minh Hai & Vu Quynh Hoa,
2016; My et al., 2017; Wang et al., 2018
Education situation
Promotion
Price
Rimal et al., 2001; Van Loo et al., 2011; Haghjou et al., 2013
Rimal et al., 2001; Radam et al., 2007; Ortega et al., 2011; Janssen, 2018
Ortega et al., 2011; Ngo Minh Hai & Vu Quynh Hoa, 2016
Gracia & De Magistris, 2008; Yin et al., 2010
Promotion and
media
Certificates
Health situation
Gracia & De Magistris, 2008; Yin et al., 2010; Ngo Minh Hai & Vu Quynh
Hoa, 2016
Quality
Product
contributions
Environmentally friendly
Taste
Gracia & De Magistris, 2008; Ortega et al., 2011
Yin et al., 2010; Ortega et al., 2011
Yin et al., 2010; Janssen, 2018
Yin et al., 2010; Janssen, 2018
Haghjou et al., 2013
Color
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Huang, 1996; Huang et al., 1999; Radam et al., 2007; Gracia & De
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Income
Thompson & Kidwell, 1998; Huang et al., 1999; Radam et al., 2007; Yin et
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Children family members
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Trust and comprehension of
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Concern about
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behaviors
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Huang, 1996; Xu & Wu, 2010
Huang, 1996
Concern about nutritional
values
767
Theoretical and practical isssues of research on the consumption needs for safe foods in Vietnam using the WTP model
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Research on safe food consumption needs using
the WTP approach is consistent with current
consumption trends and in line with the national
agricultural development strategy orientation.
Asatryan A. A. (2004). Data mining of market information
to assess at-home pork demand, Doctor of philosophy,
The results of the empirical studies mentioned
above have contributed greatly to decision
making of enterprises, agricultural development
policies, and public health. The WTP estimation
methods implemented such as CV, CE, and AE
have made significant contributions to the
assessment process of the WTP for safe foods. In
addition, the application of analytical models,
such as the discriminant analysis, logistics
regression model, and combined models, have
helped to evaluate the influences of explanatory
factors of WTP for safe foods such as consumer
behaviors, health awareness, demography factors,
individual characteristics, media and promotion
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Many previous studies have explained the
effects of a variety of explanatory variables of
consumers’ WTP for safe foods such as age,
gender, income, and health concerns, etc.
through the different WTP models. They are
important references for Vietnam’s safe food
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various factors affecting consumption trends for
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Acknowledgments
We would like to express our very great
appreciation to the Faculty of Accounting and
Business Management, Vietnam National
University of Agriculture for their help in
offering us the resources in running our analyses.
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