IMPLICIT PRICE ESTIMATION OF QUALITY ATTRIBUTES INFLUENCING RICE PRICES AND CHOICE DECISIONS OF CONSUMERS IN NIGERIA
Abstract
Consumers’ preference for imported rice brands in Nigeria has been largely due to differences in the quality attributes of local and imported rice brands. This paper presents
the findings of a study conducted in the Federal Capital Territory (FCT), Nigeria to determine the relative importance and prices consumers pay for rice quality attributes.
Hedonic model was estimated using 2014 dataset collected from a survey of 460 rice consumer households. The results showed that the household respondents paid an average price
of NGN10,416 ($53) and NGN7,567 ($38) for a 50 kg bag of imported and local rice brands respectively. Quality attributes contribute about 48–52% of the prices consumers paid for rice.
High swelling capacity, whiter after-cook color, neatness, and grains separateness mostly influence market prices of imported rice in Nigeria as consumers would pay an average of additional NGN326 ($1.65), NGN320 ($1.60), NGN158 ($0.80) and NGN122 ($0.61) respectively on these quality attributes in order to avoid local rice. These findings present rice breeders,
processors and marketers with investment challenges as well as opportunities of which the implications for designing quality improvement and marketing policies and programmes
for the development of Nigeria’s rice industry were discussed.
Keywords
marginal implicit price; quality attributes; rice brands; Nigeria
References
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Chamhuri, N. and Batt, P.J. (2013). Understanding the relationship between perceived quality cues and quality attributes in the purchase of meat in Malaysia. Journal of International Food and Agribusiness Marketing, 25(3), 187-208.
Chiou, G.T., Chen, D.T. and Capps, O. (1993). A structural investigation of biotechnological impacts on cotton quality and returns. American Journal of Agricultural Economics 75(May 1993),467–78.
Dalton, T.J. (2004). A household hedonic model of rice traits: economic values from farmers in West Africa. Agricultural Economics, 31(2004) 149-159.
Demont, M., Zossou, E., Rutsaert, P., Ndour, M., Van Mele, P., and Verbeke, W. (2012). Consumer valuation of improved rice parboiling technologies in Benin. Food Quality and Preference, (23), 63-70.
DontsopNguezet, P. M., Okoruwa, V.O., Adeoti, A. I., and Adenegan, K.O. (2012). Productivity impact differential of improved rice technology adoption among rice farming households in Nigeria. Journal of Crop Improvement, 26(1), 1-21.
Duvenage, S.S., Schonfeldt, H.C., and Kruger, R. (2010). Food product attributes guiding purchasing choice of maize meal by low-income South African consumers. Development Southern Africa, 27(3), 309-331.
Eastwood, D. B., Brooker, J.R. and Terry, D.E. (1986). Household nutrient demand: uses of characteristics theory and a common attributes model. Southern Journal of Agricultural Economics. 18, 2(December 1986), 235–46.
Faruq, G., Zakaria, H. P., and Arash, N. (2015). Effects of ageing on selected cooking quality parameters of rice. International Journal of Food Properties, 18(1), 922-933.
Goodwin, H.L., Holcomb, R, B. and Rister. M.E. (1995). A study of Asian-American rice demand. Work. paper, Dept. of Agricultural Economics, Texas A&M University, June 1995.
Gyimah-Brempong, K., Dorosh, P., Kuku, O., Pradesha, A., and Ajibola, A. (2012). Informing Nigeria’s agricultural transformation agenda with policy analysis and research evidence. Paper presented at NSSP National Conference held in Abuja, Nigeria, November 13-14, 2012.
Hasan, M.M., Rafii, M.Y., Ismail, M.R., Mahmood, M., Rahim, H.A., Alam, M.A., Ashkani, S., Malek, M.A., and Latif, M.A. (2015). Maker-assisted backcrossing: a useful method for rice improvement. Biotechnology & Biotechnological Equipment, 29(2), 237-254.
Hiroyuki, T., Michael, J., Jawoo, K., Tewodaj, M., and Akeem, A. (2012). Growth potential for the domestic rice economy. Paper presented at NSSP National Conference held in Abuja, Nigeria, November 13-14, 2012.
Houthakker, H. S. 1952. Compensated changes in quantities and qualities consumed. Revised Economics Studies, 19(1952), 155-64.
Hubbard, E.M., Jervis, S.M., and Drake, M.A. (2016). The effect of extrinsic attributes on liking of cottage cheese. Journal of Dairy Science, (99), 183-193.
Jordan, L. J., Shewfelt, R. L., Prussia, S.E. and Hurst, W. C. 1985. Estimating implicit marginal prices of quality characteristics of tomatoes. Southern Journal of Agricultural Economics, December, 1985
Kaur, S., Panesar, P. S., Bera, M. B., and Kumari, S. (2014). Physio-chemical, textural, pasting, and in vitro digestion properties of some Basmatic and Non-Basmatic rice cultivars. International Journal of Food Properties, 17(5), 1055-1066.
Kim, H.S., and Yim, H.R. (2014). Exploratory study of Korean traditional food, rice cake’s product attributes, and customers’ satisfaction and loyalty. Journal of Culinary Science & Technology, 12(4), 339-353.
Ladd, G. W. (1982). Survey of promising developments in demand analysis: economics of product characteristics. G. C. Rausser, (ed.), New Directions in Econometric Modeling and Forecasting in U.S. Agriculture. New York: North Holland. (1982), 17-54.
Ladd, G. W. and Martin, M.B. (1976). Prices and demands for input characteristics. American Journal of Agricultural Economics. 58(1976), 21-30.
Ladd, G. W. and Suvannunt, V. (1976). A Model of Consumer Goods Characteristics. American Journal of Agricultural Economics., 58(1976): 504-510.
Loose, S.M., and Szolnoki, G. (2012). Market price differentials for food packaging characteristics. Food Quality and Preferences, 25(2), 171-182.
Louviere, J. J., Hensher, D. A., and Swait, D.J. (2000). Stated choice methods. Analysis and applications. Cambridge University Press.
Lloyd , M.A., Coons , L.M., Engstrom , E.E., Shintaro P. , Pahulu , H.F., Ogden , L.V., and Pike, O.A. (2014). Sensory and nutritional quality of white rice after residential storage for up to 30 years. International Journal of Food Sciences and Nutrition, 65(3), 320-326.
Maranan, C. L., Duff, B. and Juliano, B. O. (1992). Quality preferences for modern and traditional rice at the retail level: the Philippine case. pages 87-95 in Consumer demand for rice grain quality. International Rice Research Institute, P.O. Box 933, Manila, Philippines.
Mi-Young, K., Rico, C.W., Chae-Eun, K., and Sang-Chul, L. (2011). Physiochemical properties and eating qualities of milled rice from different Korean elite rice varieties. International Journal of Food Properties, 14(3), 640-653.
Morris, C.F. (2016). Grain Quality Attributes for Cereals Other than Wheat. Food Science.
Muriel, C.D., Siet, J.S., and Gerrit, A. (2016). Consumer segmentation based on food category attribute importance: The relation with healthiness and sustainability perceptions. Food Quality and Preference, 48(A), 99-106.
NPC. (2006). National Population and Housing Census. National Population Commission Accessed 20th December 2013, available from: http://www.population.gov.ng/index.php/censuses
Olszewski, W., and Wolinsky, A. (2016). Search for an object with two attributes. Journal of Economic Theory, (161),145-160.
Punch (2012). Nigerians eating 10 year old rice. Accessed 20th December 2013, available from: http://www.punchng.com/business/business-economy/nigerians-eating-10-year-old-rice-investigation/
Roy, P., Ijiri, T., Okadome, H., Nei, D., Orikasa, T., Nakamura, N., Shiina, T. (2008). Effect of processing conditions on overall energy consumption and quality of rice (Oryza sativa L.). Journal of Food Engineering, 89(3), 343-348.
Sar, S., Gilbert, R.G., and Marks, G.C. (2012). Household rice choice and consumption behaviour across agro-climatic zones of Cambodia. Journal of Hunger & Environmental Nutrition, 7(2-3),333-346.
Sudha, V., Donna, S., Biling, H., Malik, V., Jones, C., Wedick, N.M., Hu, F.B., Willet, W., Bai, M.R., Ponnalagu, M.M., Arumugan, K., and Mohan, V. (2013). Consumer acceptance and preference study (CAPS) on brown and undermilled Indian rice varieties in Chennai, India. Journal of the American College of Nutrition, 32 (1),50-57.
Suwannaporn, P., and Linnemann, A. (2008). Consumer preferences and buying criteria in Rice: A study to identify market strategy for Thailand Jasmine rice export. Journal of Food Products Marketing, 14(4),33-53.
Theil, H. (1965). Qualities, Prices, and Budget Inquiries. Revised Economics Studies 19(1952):129-47. U.S. Department of Agriculture. "Losses in Agriculture." USDA Handbook, No. 291, 1965.
Tomlins, K.I., Manful, J.T., Larwer, P. and Hammond, L. (2005). Urban consumer preferences and sensory evaluation of locally produced and imported rice in West Africa. Food Quality and Preference, 16(1),79-89.
Unnevehr, L. J. (1992). Methodologies for measuring consumer preferences and welfare effects of quality improvement. Pages 21-33 in Consumer demand for rice grain quality. International Rice Research Institute, P.O. Box 933, Manila, Philippines.
USDA (2012). United States Department of Agriculture, International Data Base, 2012.
Waugh, F. V. (1928). Quality factors influencing vegetable prices. Journal of Farm Economics. 19(1928),185-96.
Wedgwood, H. and Duff, B. (1992). The economics of rough rice quality at the farm level. Pages 159-174 in Consumer demand for rice grain quality. International Rice Research Institute, P.O. Box 933, Manila, Philippines.
Wendy, C.P., Latif, M.A., Rafii, M.Y., Ismail, M.R. and Puteh, A. (2016). Advances to improve the eating and cooking qualities of rice by marker-assisted breeding. Critical Reviews in Biotechnology. 36(1),87-98.
Wilson, W. W. (1984). Hedonic prices in the malting barley market. Western Journal of Agricultural Economics. 9(1984),29-40.
Chamhuri, N. and Batt, P.J. (2013). Understanding the relationship between perceived quality cues and quality attributes in the purchase of meat in Malaysia. Journal of International Food and Agribusiness Marketing, 25(3), 187-208.
Chiou, G.T., Chen, D.T. and Capps, O. (1993). A structural investigation of biotechnological impacts on cotton quality and returns. American Journal of Agricultural Economics 75(May 1993),467–78.
Dalton, T.J. (2004). A household hedonic model of rice traits: economic values from farmers in West Africa. Agricultural Economics, 31(2004) 149-159.
Demont, M., Zossou, E., Rutsaert, P., Ndour, M., Van Mele, P., and Verbeke, W. (2012). Consumer valuation of improved rice parboiling technologies in Benin. Food Quality and Preference, (23), 63-70.
DontsopNguezet, P. M., Okoruwa, V.O., Adeoti, A. I., and Adenegan, K.O. (2012). Productivity impact differential of improved rice technology adoption among rice farming households in Nigeria. Journal of Crop Improvement, 26(1), 1-21.
Duvenage, S.S., Schonfeldt, H.C., and Kruger, R. (2010). Food product attributes guiding purchasing choice of maize meal by low-income South African consumers. Development Southern Africa, 27(3), 309-331.
Eastwood, D. B., Brooker, J.R. and Terry, D.E. (1986). Household nutrient demand: uses of characteristics theory and a common attributes model. Southern Journal of Agricultural Economics. 18, 2(December 1986), 235–46.
Faruq, G., Zakaria, H. P., and Arash, N. (2015). Effects of ageing on selected cooking quality parameters of rice. International Journal of Food Properties, 18(1), 922-933.
Goodwin, H.L., Holcomb, R, B. and Rister. M.E. (1995). A study of Asian-American rice demand. Work. paper, Dept. of Agricultural Economics, Texas A&M University, June 1995.
Gyimah-Brempong, K., Dorosh, P., Kuku, O., Pradesha, A., and Ajibola, A. (2012). Informing Nigeria’s agricultural transformation agenda with policy analysis and research evidence. Paper presented at NSSP National Conference held in Abuja, Nigeria, November 13-14, 2012.
Hasan, M.M., Rafii, M.Y., Ismail, M.R., Mahmood, M., Rahim, H.A., Alam, M.A., Ashkani, S., Malek, M.A., and Latif, M.A. (2015). Maker-assisted backcrossing: a useful method for rice improvement. Biotechnology & Biotechnological Equipment, 29(2), 237-254.
Hiroyuki, T., Michael, J., Jawoo, K., Tewodaj, M., and Akeem, A. (2012). Growth potential for the domestic rice economy. Paper presented at NSSP National Conference held in Abuja, Nigeria, November 13-14, 2012.
Houthakker, H. S. 1952. Compensated changes in quantities and qualities consumed. Revised Economics Studies, 19(1952), 155-64.
Hubbard, E.M., Jervis, S.M., and Drake, M.A. (2016). The effect of extrinsic attributes on liking of cottage cheese. Journal of Dairy Science, (99), 183-193.
Jordan, L. J., Shewfelt, R. L., Prussia, S.E. and Hurst, W. C. 1985. Estimating implicit marginal prices of quality characteristics of tomatoes. Southern Journal of Agricultural Economics, December, 1985
Kaur, S., Panesar, P. S., Bera, M. B., and Kumari, S. (2014). Physio-chemical, textural, pasting, and in vitro digestion properties of some Basmatic and Non-Basmatic rice cultivars. International Journal of Food Properties, 17(5), 1055-1066.
Kim, H.S., and Yim, H.R. (2014). Exploratory study of Korean traditional food, rice cake’s product attributes, and customers’ satisfaction and loyalty. Journal of Culinary Science & Technology, 12(4), 339-353.
Ladd, G. W. (1982). Survey of promising developments in demand analysis: economics of product characteristics. G. C. Rausser, (ed.), New Directions in Econometric Modeling and Forecasting in U.S. Agriculture. New York: North Holland. (1982), 17-54.
Ladd, G. W. and Martin, M.B. (1976). Prices and demands for input characteristics. American Journal of Agricultural Economics. 58(1976), 21-30.
Ladd, G. W. and Suvannunt, V. (1976). A Model of Consumer Goods Characteristics. American Journal of Agricultural Economics., 58(1976): 504-510.
Loose, S.M., and Szolnoki, G. (2012). Market price differentials for food packaging characteristics. Food Quality and Preferences, 25(2), 171-182.
Louviere, J. J., Hensher, D. A., and Swait, D.J. (2000). Stated choice methods. Analysis and applications. Cambridge University Press.
Lloyd , M.A., Coons , L.M., Engstrom , E.E., Shintaro P. , Pahulu , H.F., Ogden , L.V., and Pike, O.A. (2014). Sensory and nutritional quality of white rice after residential storage for up to 30 years. International Journal of Food Sciences and Nutrition, 65(3), 320-326.
Maranan, C. L., Duff, B. and Juliano, B. O. (1992). Quality preferences for modern and traditional rice at the retail level: the Philippine case. pages 87-95 in Consumer demand for rice grain quality. International Rice Research Institute, P.O. Box 933, Manila, Philippines.
Mi-Young, K., Rico, C.W., Chae-Eun, K., and Sang-Chul, L. (2011). Physiochemical properties and eating qualities of milled rice from different Korean elite rice varieties. International Journal of Food Properties, 14(3), 640-653.
Morris, C.F. (2016). Grain Quality Attributes for Cereals Other than Wheat. Food Science.
Muriel, C.D., Siet, J.S., and Gerrit, A. (2016). Consumer segmentation based on food category attribute importance: The relation with healthiness and sustainability perceptions. Food Quality and Preference, 48(A), 99-106.
NPC. (2006). National Population and Housing Census. National Population Commission Accessed 20th December 2013, available from: http://www.population.gov.ng/index.php/censuses
Olszewski, W., and Wolinsky, A. (2016). Search for an object with two attributes. Journal of Economic Theory, (161),145-160.
Punch (2012). Nigerians eating 10 year old rice. Accessed 20th December 2013, available from: http://www.punchng.com/business/business-economy/nigerians-eating-10-year-old-rice-investigation/
Roy, P., Ijiri, T., Okadome, H., Nei, D., Orikasa, T., Nakamura, N., Shiina, T. (2008). Effect of processing conditions on overall energy consumption and quality of rice (Oryza sativa L.). Journal of Food Engineering, 89(3), 343-348.
Sar, S., Gilbert, R.G., and Marks, G.C. (2012). Household rice choice and consumption behaviour across agro-climatic zones of Cambodia. Journal of Hunger & Environmental Nutrition, 7(2-3),333-346.
Sudha, V., Donna, S., Biling, H., Malik, V., Jones, C., Wedick, N.M., Hu, F.B., Willet, W., Bai, M.R., Ponnalagu, M.M., Arumugan, K., and Mohan, V. (2013). Consumer acceptance and preference study (CAPS) on brown and undermilled Indian rice varieties in Chennai, India. Journal of the American College of Nutrition, 32 (1),50-57.
Suwannaporn, P., and Linnemann, A. (2008). Consumer preferences and buying criteria in Rice: A study to identify market strategy for Thailand Jasmine rice export. Journal of Food Products Marketing, 14(4),33-53.
Theil, H. (1965). Qualities, Prices, and Budget Inquiries. Revised Economics Studies 19(1952):129-47. U.S. Department of Agriculture. "Losses in Agriculture." USDA Handbook, No. 291, 1965.
Tomlins, K.I., Manful, J.T., Larwer, P. and Hammond, L. (2005). Urban consumer preferences and sensory evaluation of locally produced and imported rice in West Africa. Food Quality and Preference, 16(1),79-89.
Unnevehr, L. J. (1992). Methodologies for measuring consumer preferences and welfare effects of quality improvement. Pages 21-33 in Consumer demand for rice grain quality. International Rice Research Institute, P.O. Box 933, Manila, Philippines.
USDA (2012). United States Department of Agriculture, International Data Base, 2012.
Waugh, F. V. (1928). Quality factors influencing vegetable prices. Journal of Farm Economics. 19(1928),185-96.
Wedgwood, H. and Duff, B. (1992). The economics of rough rice quality at the farm level. Pages 159-174 in Consumer demand for rice grain quality. International Rice Research Institute, P.O. Box 933, Manila, Philippines.
Wendy, C.P., Latif, M.A., Rafii, M.Y., Ismail, M.R. and Puteh, A. (2016). Advances to improve the eating and cooking qualities of rice by marker-assisted breeding. Critical Reviews in Biotechnology. 36(1),87-98.
Wilson, W. W. (1984). Hedonic prices in the malting barley market. Western Journal of Agricultural Economics. 9(1984),29-40.
Obih, U., & Baiyegunhi, L. (2017). IMPLICIT PRICE ESTIMATION OF QUALITY ATTRIBUTES INFLUENCING RICE PRICES AND CHOICE DECISIONS OF CONSUMERS IN NIGERIA. Journal of Agribusiness and Rural Development, 45(3), 639–653. https://doi.org/10.17306/J.JARD.2017.00348
Uchenna Obih
Lloyd J. S. Baiyegunhi
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