Consumers’ willingness to pay for geographical origin labels: Evidence from the Turkish table olive

Abstract

Background and aim: A geographical indication (GI) confirms the products’ geographical origin. GI products derive their quality and reputation from this origin. Protected Designation of Origin (PDO) labelling guarantees that the product is produced, processed and prepared in a specific geographical area. PDO labelling helps sustain the product’s naturalness and quality by preserving local identity and culture. Therefore, consumers are willing to pay (WTP) more for such products. PDO labelling elevates brand building and supports rural tourism and rural development. Olive producers can reach a high-profit margin by obtaining PDO labels. Despite the benefits, PDO labelling offers PDO-labelled table olive consumption below desired levels. This shows that consumers still need to understand PDO labelling fully. This research aims to reveal consumers’ GI knowledge of the Gemlik table olive and how their knowledge affects consumption levels and WTP. Methods: Data was collected from 648 residents in Bursa, Turkey using a public-intercept survey. The study used descriptive analysis and used SPSS 22 software package to analyse the data. Results: The result showed that 59.6% of participants were knowledgeable about GIs, and 56.3% were knowledgeable about PDO labelled Gemlik olive. Only 37.5% of respondents consumed PDO labelled food products, and 32.7% consumed PDO labelled Gemlik olive. Over half (51.4%) of the participants see themselves as average, 31.8% moderately, and 16.8% very knowledgeable about olives. While 79% of the consumers indicated WTP for the PDO label, half could pay 10% or less. The proportion of those who said they could spend more than 25% remained at 11%. Conclusion: Consumers are willing to pay more for PDO labelled Gemlik olives as their knowledge increases.