Willingness to Pay for Certified Wooden Furniture: A Market Segment Analysis

Knut Veisten, Birger Solberg

Abstract


Market segmentation techniques were applied to identify and describe potential consumer clusters with highest hypothetical willingness to pay (WTP) for certified wooden furniture. Representative samples of the British and Norwegian population were surveyed by telephone and asked to choose between two profiles of wooden furniture, where one was eco-labeled and more expensive. The eco-labeled would certify that the wood originated from sustainable forestry. The survey data allowed for substantiating the attribute segmenting with the hypothetical choice behavior between eco-labeled and unlabeled wood and logit model estimates of WTP. The statistical method to identify the segments was k-means cluster analysis, principally using stated importance of product attributes and estimated WTP for eco-labeling as grouping variables.

One segment profiled as an "eco-segment" was confirmed by placing a higher value on the dimensions (values) of environmentalism—trusting environmental and outdoor organizations regarding information about forestry and environment, and having a higher rate of membership in environmental organizations. This "eco-segment" amounted to more than 1/4 of the samples. The British eco-segment could be described as relatively "greener" than the Norwegian. The British also had higher estimated WTP for eco-labeling compared to the Norwegians. The eco-segments had their media interest directed more towards intellectual issues than the other segments. Demographically, the eco-segments did not differ significantly from the other segments, except that the British had a greater female majority.


Keywords


Certification;eco-labeling;market segmentation;stated choice;principal component analysis;willingness to pay;wooden furniture;wood products

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