Do some consumers like local or organic or origin-based food because it tastes better? Because it tells them that the food is authentic, natural, sustainable, or has other intangible features? Or just because they like the idea of local, organic, origin-based and nothing else? This little experiment used a convenient sample of Michigan State University students to test a Structural Equation Model that disentangles the direct effect of these so called "credence attributes" (e.g. organic, local, origin, where consumers just have to "believe" that the food attribute is there) on consumers' attitudes and purchasing intentions. Managers and practitioners can use the model to better understand why consumers value and purchase certain attributes, and thus design more effective marketing campaigns. Relative to other methods developed by researchers so far, this one based on Structural Equation Modelling is more sophisticated in disentangling the complex network of inferences in consumers' mind. That's why Structural Equation Modelling, usually largely used in psychology, has potential to contribute to the field of economics to explain consumer choices and, on a macro view, consumption trends and demand functions.

1. The Direct and Indirect Effect of
Credence Attributes on Consumers’
Attitudes towards Agri-Food Products
Domenico Dentoni, Glynn Tonsor, Roger Calantone, Chris Peterson
Product Center, Department of Agricultural, Food and Resource Economics
Eli Broad Business School
Michigan State University

2. Credence Attributes
• A set of different attributes with the same nature
– Organic
– Traceability
– Fair Trade
– Locally-Grown
– Place-of-Origin
– Animal Welfare
Commonalities:
• Used to signal quality of products
• Demanded by growing market segment
• Desired with different motivations
• Information Economics
• Consumer Economics
• Consumer Psychology

3. Literature Review
• Ag Econ and Marketing Research on Credence Attributes
Credence
Attributes
Consumer
WTP for a
Product
Consumer Attributes
Indirect Effect Direct Effect
Consumer
Attitudes
toward a
Product
Perceived
Quality
Direct and Indirect Effect of Credence Attributes (Van der Lans et al., 2001)

4. 2 Gaps in the Literature
1) Impact of Adding a CA on Consumers’ WTP for a Product
BUT
Seller’s Claim on CA ≠ Buyer’s Belief in the Presence of CA

5. 2 Gaps in the Literature
2) Impact CA on WTP mediated by Consumers’ Perceived
Quality
BUT
Perceived Quality ≠ Consumers’ Beliefs in the Presence of
Specific Product Attributes
Consumer
Attitudes
Perceived
Quality
Bel. Fresh
Bel.
Family
Business
Bel. Local
Economy

6. Conceptual Framework
Sources of
Information
Seller’s
CA Claim
Cons’ CA
Belief
Search
Attributes
Cons’
Attitude
Indirect Effect
Cons’ EA
Beliefs
Direct Effect
Cons’ OCA
Beliefs
Another
Paper
Learning Theory (Fishbein, 1967); Attributes as Cues (Rao and Monroe, 1989).

7. Research Question and Hyp.
Cons Familiarity
Cons’ CA
Belief
Cons’
Attitude
Indirect Effect
Cons’ EA
Beliefs
Direct Effect
Cons’ OCA
Beliefs
H2
H1
H3
H4
H4
Cons Familiarity
• Do Credence Attributes have a Direct Effect on Consumer Attitudes or is this Effect
Mediated by Consumers’ Beliefs in the presence of Experience or Other CAs?

8. Implications
• Knowing consumers motivations -> Targeted promotion
• Actors promoting CA have “opinion leaders” as potential partners!
Consumer
Attitudes
Bel. Eco-
Friendly
Bel. Family
Business
Bel. Local
Economy
Cons. Belief
Locally-Grown
Bel. Fresh

9. Methodology
Structural Equation Model
• Path Analysis, to estimate Beliefs (mediators) and Familiarity (moderator)
• Factor Analysis, to measure Consumer Attitudes (latent variable)
Product and CA
• Apples
• Locally-Grown
Sample (Pilot Test)
• 40 MSU students
• Will be 220 MSU students, randomly selected
• Why student (vs. non-student sample)?

10. Experiment Procedure
On-Line Questionnaire
Pre Test, to identify mediators:
• Beliefs EA -> L-G Apple is sweet, good flavor, firm
• Beliefs OCA -> L-G Apple is healthy, no chem residues, no diseases
Pilot Test, measuring:
• 2 Treatments (Locally-Grown Claim; a Picture)
• Beliefs (1 Likert-Scale Item)
• Attitudes (4 Likert-Scale Items)
• Familiarity (10 items = score)

11. Results
Dep Var Independent Variables E R2
BLG .189 LGCLAIM .206 LGPIC .092 FAMLG -.027 FAMPIC
-.155 FAMPICLG
.942 .112
BHEALTH .404BLG .237FAM -.286PIC .301FAMPIC -.313FAMBLG .719 .484
BPEST .339BLG .269FAM -.376PIC .114FAMPIC -.484FAMBLG .536 .713
BCHEM .535BLG .220FAM -.222PIC .114FAMPIC -.425FAMBLG .652 .575
BGFLAV .484BLG .316FAM -.271PIC .254FAMPIC -.484FAMBLG .548 .700
BSWEET .467BLG .329FAM -.370PIC .244FAMPIC -.476FAMBLG .506 .744
BFIRM .441BLG .231FAM -.435PIC .349FAMPIC -.395FAMBLG .542 .707
ATTITUD .146BLG .106 BHEAL .265 BPEST -.073 BCHEM .219 BGFLAV
. .164 BSWEET .230 BFIRM
.486 .764
CHI-SQUARE = 1467.214 WITH 124 DEGREES OF FREEDOM. P-VALUE FOR CHI-SQUARE
= .00000; ROOT MEAN-SQUARE ERROR OF APPROXIMATION (RMSEA)= .383.

12. Results
Cons Familiarity
Cons’ Bel.
Locally
Grown
Cons’
Attitude
toward
an Apple
Indirect Effect
Bel. NO
Pests and
Diseases
Direct Effect
Bel. Good
Flavor
Cons Familiarity
Bel. Firm
• Locally-Grown DOES have both Direct and Indirect Effect
• Familiarity DOES act as negative moderator

13. Conclusion
• Results Preliminary
Conceptual Contribution:
• Seller Claim ≠ Buyer Beliefs
• CA is cue of other Attributes vs. Perceived Quality
• Familiarity moderates Indirect Effect of CA
Methodological Contribution:
• SEM vs. Economic Valuation Methods
Applications on Other Products, CAs, Markets

14. …Thank You
We greatly value your questions, comments and
suggestions.