Institutionalizing the Jurisdictional Approach: Exploring Consumers' Evaluation of Commodity Sourcing from Verified Sourcing Areas

Abstract

Global commodity production has a significant and ever-increasing social, economic, and environmental impact on the globe and those inhabiting it. To mitigate the industry’s negative effects, much attention has been given to private initiatives, such as certification. However, with those initiatives struggling to deliver a sustainable commodity industry, both in terms of scale and breadth of impact, interest is now growing in landscape and jurisdictional approaches (JAs). Those initiatives are built on untested market assumptions that consumers will value and demand JA-sourced products and will thus reward companies for engaging in JA-sourcing. This thesis aims to test this key assumption of JAs. Specifically, it aims to investigate consumers’ valuation of products containing commodities sourced from a new type of JA called Verified Sourcing Areas (VSAs), as well as the drivers of this valuation to derive recommendations for marketing VSAs in a way that maximizes its chances of institutionalization. Using the theory of planned behavior and the concept of willingness-to-pay (WTP), and by accounting for the plan to indicate the VSA-of-origin on product packaging, hypotheses were formed regarding drivers of WTP for VSA-sourcing. These hypotheses were tested on data from an online choice-based conjoint analysis survey that was sent to a representative, quota-based sample of the population of the United Kingdom consisting of 585 respondents. By analyzing response distributions, it is found that consumers value VSA-sourcing similarly to certified products, thus indicating that consumers will value and demand VSA-sourced products when they hit the market. Thus, this assumption of JAs is tested and confirmed. Furthermore, using logit modeling, it is found that consumers are very price sensitive, but that subjective norms (i.e., social pressures) significantly affect consumers’ WTP for VSA sourcing positively and thus decrease price sensitivity. On the other hand, perceived behavioral control is found to significantly affect this WTP negatively, and consumer attitudes are not found to be significant drivers. Finally, differences in VSAs-of-origin do not significantly affect peoples’ WTP for VSA-sourcing. Implications, of these drivers as well as consumers’ general valuation of VSA sourcing, for the institutionalization of the VSA initiative and the JA in general, are discussed. Moreover, recommendations for marketing the VSA initiative are given.