measuring rural consumers willingness to pay for quality labels using experimental auctions the case of aflatoxin free maize in kenya aflatoxins are a common health hazard in tropical countries especially in rural areas new methods to reduce aflatoxin levels in food staples as well as cheaper test methods are being developed but consumers willingness to pay wtp for these improvements is unknown a survey was conducted with a representative sample of rural consumers 1 344 in total 63 women in all major maize production zones of kenya the survey included an experimental auction with maize products of different qualities the results showed that many rural consumers were aware of aflatoxins but few understood their health risks respondents were willing to pay a premium for maize tested for aflatoxins and labeled but asked a high discount for maize that was visibly contaminated with moldy grain the premium was higher for respondents with education and in regions with aflatoxicosis outbreaks knowledge of aflatoxins substantially reduced the overall wtp but did not increase the wtp for tested maize welfare analysis indicates that mandatory testing would result in substantial benefits if the cost of testing can be lowered to below the premium

statistical efficiency of double bounded dichotomous choice contingent valuation the statistical efficiency of conventional dichotomous choice contingent valuation surveys can be improved by asking each respondent a second dichotomous choice question which depends on the response to the first question if the first response is yes the second bid is some amount greater than the first bid while if the first response is no the second bid is some amount smaller this double bounded approach is shown to be asymptotically more efficient than the conventional singlebounded approach using data from a survey of californians regarding their willingness to pay for wetlands in the san joaquin valley we show that in a finite sample the gain in efficiency can be very substantial

the caloric costs of culture evidence from indian migrants anthropologists have long documented substantial and persistent differences across social groups in the preferences and taboos for particular foods one natural question to ask is whether such food cultures matter in an economic sense in particular can culture constrain caloric intake and contribute to malnutrition to answer this question i first document that inter state migrants within india consume fewer calories per rupee of food expenditure compared to their non migrant neighbors even for households with very low caloric intake i then form a chain of evidence in support of an explanation based on culture that migrants make nutritionally suboptimal food choices due to cultural preferences for the traditional foods of their origin states first i focus on the preferences themselves and document that migrants bring their origin state food preferences with them when they migrate second i link together the findings on caloric intake and preferences by showing that the gap in caloric intake between locals and migrants is related to the suitability and intensity of the migrants origin state food preferences the most adversely affected migrants households in which both husband and wife migrated to a village where their origin state preferences are unsuited to the local price vector would consume 7 percent more calories if they possessed the same preferences as their neighbors

stable matchings and rematching proof equilibria in a two sided matching market abstract in this paper we introduce the notion of a rematching proof equilibrium for a two sided matching market to resolve roth s open question what kind of equilibria of the game induced by any stable mechanism with respect to misreported profiles produce matchings that are stable with respect to the true profile we show that the outcome of a rematching proof equilibrium is stable with respect to the true profile even though the equilibrium profile may contain misreported preferences we also show that a rematching proof equilibrium exists moreover the nash equilibria in roth j econ theory34 1984 383 387 are shown to be rematching proof equilibria journal of economic literature classification numbers c78 d71

macroeconomic adjustment and human nutrition abstract the macroeconomic adjustments made by most developing countries over the past decade to cope with economic crises have in many cases had severe effects on the poor these effects have often been ignored in planning but it is important to address them both to avoid human suffering and to facilitate economic growth this article provides a brief synthesis of current knowledge about the short term effects of macroeconomic adjustment policies on the nutritional status of the poor and proposes action to improve the nutrition effects of future adjustment programmes

the role of unions in hiring procedures for job markets this paper studies simple hiring procedures for job markets we show that when agents act strategically only individually rational outcomes should be expected moreover if agents can form unions thereby gaining the possibility to commit on the decision to be chosen only stable allocations are implemented

consumer acceptability of yellow maize products in zimbabwe abstract this study analyzes consumers awareness of and attitudes towards yellow maize products in zimbabwe and suggests intervention strategies that will ensure increased production and consumption of the crop which is rich in provitamin a to help prevent the incidence of vitamin a deficiency prevalent among vulnerable groups data from 360 randomly selected rural and urban households show that yellow maize is known to all but few are aware of its nutritional qualities or consume it the main source of supply is imported food aid rich in oils carotenoids and fructose yellow maize easily undergoes chemical changes to produce unacceptable organoleptic properties or bad taste if poorly handled during importation these two factors are responsible for it being perceived inferior to white maize by consumers quality assurance during importation can improve consumer confidence but a long term strategy will be to vigorously promote domestic production of yellow maize varieties rich in high levels of carotene that meet the preferences of consumers drawing from a probit model regression analysis nutritional education can potentially promote yellow maize consumption especially if targeted at low income households domestic production and consumption of yellow maize will decrease vitamin a deficiency among vulnerable groups and improve food insecurity through reduced grain prices and increased incomes for farmers these results draw attention to the need for policy makers in developing countries to review their agricultural policies to ensure that they do not undermine the local production and consumption of nutritionally valuable crops

the state preference approach to general equilibrium in corporate finance abstract this paper attempts to implement the state preference approach in a multiperiod exchange economy the procedure is relevant for a further investigation of various important issues in corporate finance such as the results of modigliani and miller and the integration of the state preference and the mean variance approach to asset pricing

an equilibrium model of asset pricing with progressive personal taxes this paper examines how the progressive personal tax rate affects the equilibrium asset pricing model in a continuous time framework with progressive taxation it can be shown that the expected excess rate of return on a risky asset is an increasing function of i the covariance of asset return with aggregate consumption rate changes and ii the covariance of asset return with the aggregation of individual wealth change weighted by the investor s tax scheme progressivity index the capital asset pricing model derived in the absence of tax is shown to understate the expected excess rate of return and to have a misspecification error under the progressive tax scheme furthermore the expected excess rate of return can be decomposed as the consumption risk premium and tax premium the tax premium depends on the tax structure prevailing in the economy

mean variance theory in complete markets two paradigms in the pricing of risky assets are the complete markets model of arrow and debreu and mean variance pricing as embodied in the capital asset pricing model capm the former is primarily of theoretical interest in fact prior to the recent work of banz and miller 1978 and breeden and litzenberger 1978 there was little thought or hope of practical applications on the other hand the hegemony of the capm is due mostly to its apparent ease of applicability and to a lesser extent its empirical justification in a competitive market with no taxes transactions costs or institutional constraints on portfolio holdings the allocation of the available assets will be pareto optimal the end of period distribution of wealth or the consumption goods however will typically be pareto optimal only when there is available an arrow debreu security for each contingency since by definition a pareto superior reallocation is weakly preferred by all investors a complete set of arrow debreu markets should naturally arise provided they are not too costly to establish the complete markets model of arrow and debreu and the meanvariance capital asset pricing model capm are two paradigms of risky asset markets this paper provides an integration of these two theories we prove that the standard meanvariance separation theorem obtains in a complete market only if all investors have quadratic utility in addition the familiar capm pricing relation can hold for all assets in a complete market only if arbitrage opportunities exist on the positive side we show that the validity of this relation for the primary assets in a complete market is unaffected by the distribution of returns on the created financial assets

cash crop production food price volatility and rural market integration in the third world large farmers in the third world often devote to cash crops a larger share of their land than do small farmers this paper suggests a possible explanation even in the presence of food markets third world farmers food security is best assured by food self sufficiency a model of crop portfolio choice under multivariate risk is used to show that reasonable assumptions regarding risk and preferences reproduce the observed pattern simulations further indicate that food market integration reduces the need for food self sufficiency policy implications are drawn regarding domestic trade liberalization and agricultural technology

food marketing and pricing policy in eastern and southern africa a survey abstract this article surveys the empirical record of grain marketing and pricing policy in eastern and southern africa over 1930 1995 the paper addresses five key issues with major implications for food policy throughout africa a why the anticipated supply response to market liberalization has not yet occurred b why the common assumption of state taxation of farmers to support a cheap food policy does not apply in most of the countries in the region c why the temporary successes of the state led approach to stimulating smallholder grain production were unsustainable d why the elimination of government food subsidies associated with market reform has not adversely affected consumers and e why the fiscal cost of the marketing systems at least initially worsened rather than improved after the reforms were implemented in most countries the key future challenges for marketing policy are how to develop coordinated and financially sustainable input finance and commodity marketing systems for raising productivity growth in smallholder agriculture while overcoming inherited agricultural dualism and how to mitigate the effects of food price instability in a cost effective manner

maximal manipulation of envy free solutions in economies with indivisible goods and money abstract we consider the problem of the fair allocation of indivisible goods and money with non quasi linear preferences the purpose of the present study is to examine strategic manipulation under envy free solutions we show that under a certain domain richness condition each individual obtains the welfare level of his optimal envy free allocation by maximally manipulating the solutions this maximal manipulation theorem is helpful in analyzing the set of nash equilibrium allocations in the direct revelation games associated with a given envy free solution if an envy free solution satisfies a mild condition the set of nash equilibrium allocations in its associated direct revelation game coincides with that of envy free allocations

consumer response to maize market liberalization in urban kenya abstract the elimination of consumer food subsidies associated with structural adjustment in africa has been widely thought to exacerbate food insecurity for low income consumers this article determines how urban maize consumption and expenditure patterns have responded to the liberalization of the maize and maize meal markets in kenya the article decomposes changes in maize meal prices attributable to changes in maize grain prices and maize milling margins results are obtained through two random household surveys in nairobi the first having been conducted before and the second after liberalization the main finding of the study is that maize market liberalization has conferred substantial benefits to urban consumers the combined saving to nairobi consumers from lower maize milling costs has been roughly us 10 1 million each year about the same amount that the government of kenya allocates annually to agricultural research results also indicate that the former consumer subsidies conferred through the official marketing channel were untargeted and actually inversely related to household income the subsidies on sifted meal also served to entrench a non competitive market structure that inhibited the development of a lower cost informal milling system these findings are consistent with research results from other eastern and southern african countries showing that the negative effects of eliminating food subsidies in the state marketing system have been largely compensated by relaxing controls on private grain trade which has increased consumers access to less expensive grain products distributed through informal markets

an intertemporal general equilibrium model of asset prices this paper develops a continuous time general equilibrium model of a simple but complete economy and uses it to examine the behavior of asset prices in this model asset prices and their stochastic properties are determined endogenously one principal result is a partial differential equation which asset prices must satisfy the solution of this equation gives the equilibrium price of any asset in terms of the underlying real variables in the economy in this paper we develop a general equilibrium asset pricing model for use in applied research an important feature of the model is its integration of real and financial markets among other things the model endogenously determines the stochastic process followed by the equilibrium price of any financial asset and shows how this process depends on the underlying real variables the model is fully consistent with rational expectations and maximizing behavior on the part of all agents our framework is general enough to include many of the fundamental forces affecting asset markets yet it is tractable enough to be specialized easily to produce specific testable results furthermore the model can be extended in a number of straightforward ways consequently it is well suited to a wide variety of applications for example in a companion paper cox ingersoll and ross 7 we use the model to develop a theory of the term structure of interest rates many studies have been concerned with various aspects of asset pricing under uncertainty the most relevant to our work are the important papers on intertemporal asset pricing by merton 19 and lucas 16 working in a continuous time framework merton derives a relationship among the equilibrium expected rates of return on assets he shows that when investment opportunities are changing randomly over time this relationship will include effects which have no analogue in a static one period model lucas considers an economy with homogeneous individuals and a single consumption good which is produced by a number of processes the random output of these processes is exogenously determined and perishable assets are defined as claims to all or a part of the output of a process and the equilibrium determines the asset prices our theory draws on some elements of both of these papers like merton we formulate our model in continuous time and make full use of the analytical tractability that this affords the economic structure of our model is somewhat similar to that of lucas however we include both endogenous production and

the pricing of stock index options in a general equilibrium model this paper analyzes the pricing of stock index options in a simple general equilibrium model in this model the volatility of the stock index and the spot rate of interest are functions of a stochastic variable the paper investigates the biases that arise when using the black scholes model with the assumed volatility and interest rate dynamics it is shown that the model can in principle explain the biases observed in empirical work on stock index options

choice of technology in small and large firms grain milling in tanzania abstract it is not uncommon to find many production units in low income labor abundant and capital scarce economies such as tanzania employing sophisticated and capital intensive production techniques in such circumstances a technology choice problem exists in the sense that the technologies in use and more often the products being produced are not compatible with the resource endowment of the economy and the income levels of the majority of the population this paper evaluates the relative performance of small and large scale grain milling techniques in tanzania to identify appropriate ones and explain why some firms select inappropriate techniques and products the consequences of technology choice are then discussed within the context of employment creation output expansion surplus generation skill formation economies of scale and overall resource use

arbitrage and the existence of competitive equilibrium a general equilibrium model of markets for commodities and assets is considered the author develops the notion of a price system that admits no arbitrage opportunity and demonstrates the fundamenta l role of this concept for the theory of the existence of a competiti ve equilibrium a price system admits no arbitrage opportunity for a consumer if every bundle of desired commodities has a positive market value the author proves that the existence of a price system that a dmits no arbitrage opportunity for all consumers is sufficient for th e existence of an equilibrium copyright 1987 by the econometric society

potential health benefits of golden rice a philippine case study abstract golden rice has been genetically modified to produce beta carotene in the endosperm of grain it could improve the vitamin a status of deficient food consumers especially women and children in developing countries this paper analyses potential impacts in a philippine context since the technology is still at the stage of r d benefits are simulated with a scenario approach health effects are quantified using the methodology of disability adjusted life years dalys golden rice will not completely eliminate the problems of vitamin a deficiency such as blindness or increased mortality therefore it should be seen as a complement rather than a substitute for alternative micronutrient interventions yet the technology could bring about significant benefits depending on the underlying assumptions annual health improvements are worth between us 16 and 88 million and rates of return on r d investments range between 66 and 133 due to the uncertainty related to key parameters these results should be treated as preliminary

the valuation of multivariate contingent claims in discrete time models there are several examples in the literature of contingent claims whose payoffs depend on the outcomes of two or more stochastic variables familiar cases of such claims include options on a portfolio of options options whose exercise price is stochastic and options to exchange one asset for another this paper derives risk neutral valuation relationships rnvrs in a discrete time setting that facilitate the pricing of such complex contingent claims in two specific cases joint lognormally distributed underlying variables and constant proportional risk aversion on the part of investors and joint normally distributed underlying variables and constant absolute risk aversion preferences respectively this methodology is then applied to the valuation of several interesting complex contingent claims such as multiperiod bonds multicurrency option bonds and investment options

interlinked markets and the cash crop food crop debate in land abundant tropical agriculture the purpose of this article is to illustrate how such institutions do arise in the african context under certain preconditions it is argued that the lack of a land market due largely to a non capitalist conception of property rights over land 3 along with other conditions to be examined below leads to the failure of labor and private sector credit markets in response indigenous institutions have evolved to cope with the market failures

kenya s cereal sector reform programme managing the politics of reform abstract the political aspects of reform have been underplayed in structural adjustment programmes the problematic and inconsistent implementation of kenya s cereal sector reform programme csrp it is argued here is substantially the result of failing to manage the politics of reform good political management of the reform process would have included ensuring a clear understanding by interest groups of the likely consequences of liberalisation and full involvement of the president and cabinet from the outset in order to create an ongoing reform culture

the role of warehouse receipt systems in enhanced commodity marketing and rural livelihoods in africa most african countries have since the 1980s liberalised agriculture without experiencing food crisis as feared by sceptics but the outcome of reforms has been rather disappointing and agricultural markets remain underdeveloped and inefficient one means to improve agricultural marketing which is the focus of this paper is to develop regulated warehouse receipt wr systems the system will curtail cheating on weights and measures ease access to finance at all levels in the marketing chain moderate seasonal price variability and promote instruments to mitigate price risks it will also reduce the need for the government to intervene in agricultural markets and reduce the cost of such interventions if needed the major problem in establishing wr systems in africa is disabling elements in the policy environment drawing on experience from projects implemented in africa during the last decade 1 the authors outline how this challenge can be addressed the most crucial being to build strong stakeholder support behind the initiative 2002 elsevier science ltd all rights reserved

food aid and food markets lessons from mozambique abstract a consensus has emerged on food aid policy acknowledging the importance of short run relief considerations while emphasizing that such policy must be driven by a long run developmental perspective this requires explicit attention to the effects of food aid on food markets yet it has long been clear that short and long run objectives of food aid may conflict this tension stands in high relief in mozambique one of the most food aid dependent countries in the world this paper examines the factors determining the effects of yellow maize food aid on markets for yellow maize and white maize the staple crop in mozambique the paper finds that a food aid has helped fuel the growth of a competitive small scale milling industry and informal marketing system b yellow and white maize are substitutes in consumption and c continued availability of yellow maize food aid at prices well below import parity will depress incentives for producers and traders to invest in the white maize production and marketing system this paper presents recommendations for reforming the monetized food aid program and coordinating it more effectively with emergency aid

comparing consumer preferences for color and nutritional quality in maize application of a semi double bound logistic model on urban consumers in kenya consumer preferences for white maize in east and southern africa concerns developers of maize biofortified with provitamin a carotenoids since carotenoids impart a yellow or orange coloration urban consumers willingness to pay wtp for yellow maize was estimated using a semi double bounded logistic model based on a survey of 600 maize consumers in nairobi kenya at posho mills kiosks and supermarkets consumers showed a strong preference for white maize only a minority would buy yellow maize at the same price as white maize and fewer consumers in the posho mills 24 and kiosks 19 than in the supermarkets 34 would do so on average consumers need a price discount of 37 to accept yellow maize this discount was less at the posho mills 35 and kiosks 37 than in the supermarkets 48 most respondents 76 were aware of the existence of fortified meal and the generally showed an interest the average premium for fortified maize was much less than the discount for yellow 5 9 for those aware and 7 4 for those unaware consumer preferences were influenced by socioeconomic factors such as gender education income and ethnic background women have a stronger preference for both white maize and fortified maize than men and consumers with more education have a stronger preference for white income decreases the wtp for yellow maize as well as the price elasticity but increases the wtp for fortified maize consumers originating from western kenya have a lower preference for white while those from central kenya had a stronger preference for fortified maize

the many faces of adjustment the 1980s was a decade of adjustment for much of the third world at an early stage unicef drew attention to the serious human costs of the recession and subsequently to the impact of stabilisation and adjustment measures on vulnerable groups and the need for special policies to counter these costs jolly and cornia 1984 cornia jolly and stewart 1987 in the latter half of the decade there were apparently very major changes in the international financial institutions in these matters in their recognition of the social costs of adjustment and of the need for changes in policies

estimating consumer willingness to pay for food quality with experimental auctions the case of yellow versus fortified maize meal in kenya biofortification of maize with provitamin a carotenoids is a new approach to the alleviation of vitamin a deficiencies in africa unfortunately these varieties are yellow or orange while consumers generally prefer white consumer willingness to pay for yellow and fortified maize was compared in experimental auctions in three regions in kenya the premium that consumers are willing pay for fortified maize 24 was higher than the discount they require to buy yellow maize 11 and in one zone consumers prefer yellow yellow color is therefore not an impossible obstacle for biofortified maize although it would clearly be easier to introduce this maize first in regions where yellow maize is currently grown

predicting the effects of market reform in zimbabwe a stated preference approach a stated preference approach is used to predict likely responses to market reform in zimbabwe a random utility model is estimated using data on consumers stated preferences for alternative types of maize meal the model is used to predict demand patterns resulting from market reforms predicted demand is then compared with actual demand following market reforms an analysis of the welfare effects of alternative policy scenarios shows that coupling the removal of consumer maize subsidies with improved access to a broader range of maize meal products ameliorated many of the adverse effects of subsidy removal especially for lower income groups

in search of advice for participants in matching markets which use the deferred acceptance algorithm many centralized entry level labor markets use the firm proposing deferred acceptance da algorithm to compute the matching that is implemented among workers and firms we propose a definition of the strategic options a worker faces in the da algorithm then we develop a theory to advise workers who distinguish between the firms from which they believe not to receive a proposal the firms from which they might receive a proposal and the firms from which they certainly receive a proposal if a worker is not able to deduce which new proposals she receives after having rejected others then it is not profitable for her to submit a list that reverses the true ranking of any two acceptable firms furthermore it is not beneficial for her to include a firm in her submitted list that is unacceptable to her

games of manipulation in marriage problems abstract we analyze the equilibrium outcomes of thepreference revelation gamesinduced bypareto efficientandindividually rationalsolutions in the context ofmarriage problems we employ a nash equilibrium refinement which allows deviations by a set of permissible coalitions and show that the set of equilibrium outcomes coincides with a variant of the core that allows blocking by only permissible coalitions journal of economic literatureclassification numbers c71 c78 d71 d78

capital structure equilibrium under market imperfections and incompleteness this paper generalizes miller s supply side equilibrium argument to other forms of capital market imperfections and incompleteness if corporations possess a comparative advantage in dealing with these imperfections they have an incentive to act as financial intermediaries corporations attempts to profit from these intermediation activities dictate an optimal capital structure for the corporate sector as a whole but in equilibrium the capital structure of any single firm is a matter of indifference in addition the positive role that corporate finance plays in completing the market restores standard perfect market results on asset pricing and the associated portfolio separation properties

currency options hedging and social value in early september 1982 a conference on exchange rate determination organized by l klein and w krelle took place at the deutsche bundesbank in frankfurt at this conference i presented a paper currency options theory and practicability this paper gave formulas for the pricing and hedging of currency options and showed by means of ex post simulations their practicability examples were given of how to hedge dm options on either the spot bond or forward market cp sondermann 1985a at that time markets for currency options did not yet exist but i was convinced that these markets would soon emerge since i the theory for pricing and hedging of currency options was now available ii the computational facilities were available and most importantly iii currency options do have a social value the stormy development of these markets which started soon after has proved this expectation correct that currency options have a social value has been questioned both on practical and theoretical grounds the first type of arguments stress the speculative element of such options and refer to the forward exchange markets as the approved means of hedging against foreign exchange risks this view overlooks the fact that only future currency streams which are expected with certainty can be hedged on forward markets if for some reason these future payments fail to realize or deviate from their expected value the hedger on the forward market may end up with a costly open position this may e g be the case in a tender situation currency options as a non redundant alternative to forward markets allow for a better allocation of exchange risks the social value of currency options is

exploring the logic behind southern africa s food crises summary government action during food crises in southern africa frequently exacerbates the problems driving food staple prices well beyond import parity we argue that an inability to make credible commitments due largely to a lack of trust between public and private sectors contributes to this dynamic empirical policy analysis can facilitate resolution only within a consultative process involving a broad range of stakeholders the policies emerging from such a process are not likely to approximate first best recommendations yet the precise policies may be less important than the fact that they exist and that main stakeholders find them credible

poverty alleviation in mozambique a multi market analysis of the role of food aid abstract the use of food aid in poverty alleviation programs has been hampered by two problems the inability to target to households in need and the disincentive effects on agriculture in this paper we present econometric estimates of in almost ideal demand system aids for households in maputo mozambique and develop a multi market model to show that in maputo imported yellow maize is not only self targeting but that owing to a combination of the low cross price elasticity with locally produced staples particularly white maize and cross border trade in food products the disincentive effects on domestic agriculture have been negligible

using a discrete choice experiment to elicit the demand for a nutritious food willingness to pay for orange maize in rural zambia using a discrete choice experiment this paper estimates the willingness to pay for biofortified orange maize in rural zambia the study design has five treatment arms which enable an analysis of the impact of nutrition information comparing the use of simulated radio versus community leaders in transmitting the nutrition message on willingness to pay and to account for possible novelty effects in the magnitude of premiums or discounts the estimation strategy also takes into account lexicographic preferences of a subset of our respondents the results suggest that a orange maize is not confused with yellow maize and has the potential to compete with white maize in the absence of a nutrition campaign b there is a premium for orange maize with nutrition information and c different modes of nutritional message dissemination have the same impact on consumer acceptance

a mechanism implementing the stable rule in marriage problems abstract we consider a stable mechanism where each agent announces his her own preferences and a stable matching is selected for the announced preference profile we show that the mechanism implements the stable rule that selects all of the stable matchings in a strong equilibrium in other words when we select any stable matching to an announced preference profile in fact the matching is stable for the true preference profile in environments where agents behaviors are described by a strong nash equilibrium

you get what you pay for the link between price and food safety in kenya the lack of a reliably safe food supply in developing countries imposes both health and economic costs food safety is one of several dimensions of food quality that are typically unobservable at the time of purchase branding can overcome this information problem by allowing firms to build reputations based on the quality of their products if a reputation for food safety is valued directly by consumers or if food safety is correlated with other valued attributes firms producing safer food should be able to use their brand equity to charge higher prices in addition firms with stronger brand equity have stronger incentives to meet food safety standards in order to maintain that equity using data from more than 900 maize flour samples representing 23 distinct brands in eastern and central kenya we explore the relationship between price and contamination with aflatoxin aflatoxin is a fungal toxin common in maize groundnuts and other crops around the world we find a strong negative correlation between price and contamination at the brand level consistent with the hypothesized positive relationship between brand equity and food quality

consumer willingness to pay for genetically modified food in kenya genetically modified gm crops are popular in many regions of the world but their deployment in africa is hindered by safety concerns and regulatory issues although the continent is in dire need of boosting its food production although consumers acceptance of gm food has been analyzed in many continents no such studies have been conducted in africa therefore a survey of 604 consumers was conducted in nairobi kenya in 2003 to gauge consumers awareness of gm crops their willingness to pay wtp for gm food and the factors that influence their wtp consumers knowledge of gm crops was limited and only 38 of the 604 respondents were aware of gm crops people in higher education and income groups were more aware than others regardless people were generally appreciative of the technology and a large majority 68 would be willing to buy gm maize meal at the same price as their favorite brand consumers were however concerned about possible side effects especially on the environment and biodiversity wtp was estimated using a double bounded dichotomous choice model and the mean wtp was found to be 13 8 higher than the average price of non gm maize meal perceptions of health risk and ethical and equity concerns had a negative influence on the likelihood of purchasing gm maize meal whereas trust in government to ensure food quality had a positive influence on wtp people with at least some secondary education and those in the high income category were more likely to purchase gm maize meal at the same price the study concludes that because awareness is still low appropriate communications are needed to involve the consumer in the debate consumers acceptance in this study was high but the research needs to be expanded to rural areas where most consumers live and other survey methods need to be explored