Tohoku University Research Center for Policy Design Discussion Paper

TUPD-2022-018

Willingness to Pay for Pesticide-free Vegetables:
A Trade-off between Appearance and Pesticide Use

Katsuhito Nohara
College of Tourism, Rikkyo University

Graduate School of Economics and Management, Tohoku University

December 2022

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Willingness to Pay for Pesticide-free Vegetables: A Trade-off between
Appearance and Pesticide Use

Katsuhito Nohara
Abstract
Most Japanese consumers focus on the appearance of vegetables, for example, their shape, color, orsize. However, giving consumers precise information about the growing process of vegetables maychange their preferences. Therefore, in order to reduce food loss, it is important to change consumers'
preferences for vegetables and for producers to understand consumers' preferences, and selectvegetable production methods. Japanese supermarkets sell vegetables containing legally permissibleamounts of pesticides and chemical fertilizers, and chemical-free vegetables are generally hard to find.
Therefore, in this study, pesticide-free vegetables were cultivated from scratch to analyze whether
consumers are willing to pay a premium when presented with pesticide-free vegetables. The contingent
valuation method and double-bound dichotomous choice were used for analysis. The results revealed
that consumers' willingness to pay was not related to the appearance of the pesticide-free vegetables.
In other words, they cared neither about the color nor about the shape of the vegetables so long as they
were pesticide-free. In Japan, some farmers continue to grow organic or pesticide-free vegetables,
although they are few. Therefore, if producers know the actual needs of consumers' vegetables, they
may reduce their dependence on pesticides and chemical fertilizers and expand the market forenvironmentally friendly and healthy vegetables. Such a change could, in turn, reduce food loss.
Keywords: contingent valuation method, pesticide-free, food loss, vegetables’ appearance, discarded
vegetables
JEL codes: D12, Q13, Q18, Q50

1 Introduction
In recent years, the problem of food loss has been severe worldwide, with an annual waste of 1.3
billion tons of food. Meanwhile, Japan’s annual food loss in 2020 was approximately 5.2 million tons.
Although Japan, with a low food self-sufficiency rate on a calorie basis (37% in 2020), imports
numerous food items from foreign countries, most of them are discarded (Ministry of Agriculture,
Forestry and Fisheries of Japan, 2022a (hereafter, MAFF)). The breakdown of food loss is as follows:business food loss (2.75 million tons) and household food loss (2.47 million tons). Taking a serious

 Correspondence: noharak@rikkyo.ac.jp

College of Tourism, Rikkyo University, 1-2-26 Kitano, Niiza-shi, Saitama, Japan1

view of this situation, the Japanese government enacted the "Law for Promotion of Food Loss
Reduction" in October 2019, aiming to halve business-related food loss by 2030 compared to the 2000
level. In fact, however, this standard will be met if business food loss is reduced by another 20,000
tons to 2.73 million tons by 2030. On the other hand, the household food loss needs to be significantly
reduced from 2.47 million tons to more than 300,000 tons. According to MAFF (2022a), since 330,000
tons of household food loss is due to excessive removal of edible parts, vegetables grown in healthysoil without pesticides and guaranteed to be safe and secure may contribute to reducing this portion of
the food loss. As evidence of this, when asked in the same survey about their image of organic food,safe was the most common response (86.0%), with 60.0% of respondents saying that they can eatorganic food without peeling it because they do not have to worry about pesticide residues. Carefulconsideration will be required to determine whether organically grown vegetables in Japan are truly
safe and free of pesticide residues.
Most of the vegetables shipped are grown by conventional cultivation in Japan. This means thateven if conventionally grown vegetables are within the legally permitted standards, they are treatedwith pesticides and chemical fertilizers to keep eliminate pests away and avoid malnutrition. For
example, pesticides commonly used as fungicides on cucumbers and tomatoes include isofetamide,
iprodione, and ametoctradin. Isofetamide has been found to have adverse effects on the liver andthyroid gland in animal studies, according to Cabinet office Japan (2016). Similarly, according toCabinet office Japan (2016, 2021), iprodione has been found to be carcinogenic, and ametoctradin has
been found to cause weight loss. Furthermore, comparing the Japanese and global standards for tomato
production based on Pesticide Residue Limit Values by Product calculated by MAFF (2022b), theJapanese standard for isofetamide is 6 mg/kg, which is four times higher than that permitted in theEuropean Union (EU) and the United Kingdom (UK) and 60 times higher than that permitted in
Canada (it has not been detected in the United States (US)). The Japanese standard for iprodione andametoctradin is 5.0 mg/kg for both, but the first is 10 times the Canadian standard, and the second isapproximately 3.3 times the US and Canadian standards. The fact that the standard values for pesticide
use in Japan are higher than those in the rest of the world may be attributed to Japan's hot and humid
climate, which makes this unavoidable.
In Japan, organic agricultural products with the Japanese Agricultural Standards (JAS) mark aresold in the market. However, the MAFF defines organic agricultural products as those that have notbeen treated with agricultural chemicals or chemical fertilizers for at least two years before sowing orplanting (https://www.maff.go.jp/j/seisan/kankyo/yuuki/). This means that if pesticides or chemicalfertilizers were used two years previously, the product can be sold as organic products in the market
even if the soil contains residual pesticides. In fact, field experiments on isofetamide at the legal
application frequency showed that 1.44 mg of the 6 mg remained in the soil after one year (MAFF,
2018). According to the MAFF (2018), only 3.7% of respondents correctly understood the termorganic. In other words, consumers may mistakenly believe that organic vegetables do not include any
pesticides.
2

Table 1 Comparison of the ratio of organic land in developed countries
Country

Agricultural Land(ha)Organic land(ha)Ratio

Australia

358,895,000

35,687,799

9.944

Germany

16,645,000

1,613,785

9.695

France28,660,100

2,240,797

7.819

Canada58,199,000

1,321,072

2.270

United States

405,810,400

2,326,551

0.573

4,420,000

10,792

0.244

Japan

Source: Trávníček et al. (2021)

Now, what about vegetables grown without pesticides, which are less likely to have pesticide
residues in the soil? It seems that the national character of Japan seems to become a barrier toexpanding these vegetables. Japanese citizens tend to strongly prefer color, shape, and blemish-freevegetables and fruits, leading farmers to discard substandard vegetables even before they reach themarket. According to MAFF (2020), the percentage of people who care about the appearance ofvegetables is 36.7%, but on the flip side, this is evidence that due to the efforts of farmers and a systemthat prevents substandard vegetables from being distributed, stores are stocked with vegetables thatlook good. The incidence of substandard vegetable products is uncertain, and the amount of waste isalso unclear. However, according to MAFF (2022c), while the overall vegetable harvest in 2020 was
12,876,000 tons, 11,104,000 tons were shipped, with 1,772,000 tons not shipped (approximately 14%).
Not all of this amount is considered substandard vegetables, and some of them are used for processing,such as juice. However, some vegetables are discarded before they are counted in the harvest, so ifthese are included, the amount discarded as substandard vegetables may be higher than 1.78 million
tons. Vegetables grown without pesticides are generally inferior in appearance to conventionallygrown vegetables. However, it cannot be said that Japanese consumers have a correct understandingof the pesticides that remain on vegetables. Thus, there is room to verify whether a correctunderstanding of pesticides has the potential to expand the market for pesticide-free vegetables.
According to Willer et al. (2021), the Japanese consume very little organic produce per capita peryear compared to other developed countries: one-third that of the UK, one-twelfth that of France, onefifteenth that of the US, and one-third that of Switzerland. In addition, although global sales of organic
food products are increasing yearly, the percentage of arable land in Japan that is cultivated organicallyis minuscule compared to that in the developed countries (see Table 1). Underlying the lack of increasein organic vegetable cultivation is the farmers’ reluctance to produce organic and pesticide-freevegetables because of the costs and effort involved in organic and pesticide-free cultivation, in addition
to consumers' strong preference for vegetables that appear good and their lack of interest inenvironmental issues (MAFF, 2019).
This study aimed to analyze whether consumers are willing to pay a premium for pesticide-free3

vegetables, regardless of their appearance, when given information about the possibility of pesticide
residues not only on conventionally grown vegetables but also on organic vegetables. In other words,
this study will clarify whether consumers still value appearance when informed of the pesticides usedon conventionally grown or organic vegetables or whether they do not care about the appearance ofvegetables that do not use pesticides. In the strictest sense of the word, as pesticide-free vegetables are
not commercially available in Japan, for the purpose of this study, pesticide-free vegetables weregrown by the author and my seminar students and were presented to the respondents of the study to
examine their willingness to pay (WTP). 1To the best of my knowledge, this is the first study to reducethe inherent bias in the contingent valuation method (CVM) by offering respondents pesticide-freevegetables that are inferior in appearance to commercially available vegetables and analyzing whether
the vegetables’ appearance can be disregarded so long as they are pesticide-free and contribute to foodloss reduction. Furthermore, this study will provide knowledge that will contribute to the reductionof food loss by improving the Japanese inherent tendency to be extremely particular about theappearance of vegetables through the acquisition of correct knowledge about the use of pesticides.
The rest of this paper is structured as follows. Section 2 presents a review of previous studies,and Section 3 describes the experimental design and data collection. Section 4 presents the empirical
specification of this analysis, and Section 5 provides the conclusions and implications of this study for
future research.

2 Previous research
There have been several studies that have mentioned the relationship between the appearance ofvegetables and the use of pesticides (Hoi et al., 2009; Zhou and Jin, 2009; Rahman et al., 2021).
However, while those studies mention the relationship between consumers' concern about theappearance of vegetables and pesticide use, they do not analyze the relationship from an economic
perspective. On the other hand, some studies have focused on the value of organic foods and analyzed
them from an economic perspective, but most of them have examined the effect of organic labels or
the relationship between individual attributes and WTP (e.g., Chakrabarti et al., 2019; Dettmann andDimitri, 2010; Huang and Lin, 2007; Krystallis et al., 2006; Lin et al., 2008; McFadden and Huffman,2017). This section focuses on previous studies that have analyzed consumer preferences for organic
vegetables, with an emphasis on the problematic use of pesticides and chemical fertilizers. Katt andMeixner (2020) and Li and Kallas (2021) conducted a comprehensive review of the WTP for organic
foods.
Using a hedonic pricing model, Coulibaly et al. (2011) evaluate the potential market fororganically grown vegetables in West Africa and analyze consumer attitudes toward and perceptions
about chemical pesticide residues on vegetables. The results indicate that the misuse of chemical
1 In Japan, as part of local production for local consumption, there are supermarkets and direct sales outlets that selllocally grown vegetables, but these vegetables are never inspected and often do not indicate to consumers whether
they are grown without pesticides.

4pesticides sprayed during vegetable production can cause serious health problems. Their analysis also
reveals that consumers prefer vegetables that are undamaged, fresh, large, and well-colored, indicating
the potential demand for synthetic pesticide-free vegetables. Nandi et al. (2017) provide a detailed
analysis of consumers' WTP for organic fruits and vegetables in India and related factors affecting
consumers' WTP. They find that approximately 90% of consumers are willing to pay premium prices
ranging from 5% to more than 100% to obtain better quality vegetables and fruits. On the contrary,
the high price of organic vegetables is one of the barriers for consumers purchasing organic vegetables.
Khan et al. (2018) analyze the factors affecting WTP for pesticide-free fruits in Pakistan anddemonstrate that more than 90% of the respondents have higher WTP. In particular, demographic andsocioeconomic variables such as age, income, and health status are significantly associated with higher
WTP. Furthermore, Ha et al. (2019) focus on regional differences in the determinants of WTP fororganic vegetables in Vietnam and find that consumer perception of organic vegetables, trust in labels,
and disposable family income increase WTP for organic vegetables in both urban and rural areas.
Suanmali (2020) analyzes the factors influencing consumers' WTP for organic products (vegetables
and fruits) in Thailand to show that the most significant factor is the experience of having once
purchased organic products. Liang et al. (2021) conduct a survey in Macau and find that more than
80% of the people consider food waste a serious problem. In addition, they show that vegetables andfruits are the most common food waste from households, and income level and age have a significant
impact on WTP for efficient food waste collection and management. Thus, many previous studies haveanalyzed WTP for organic and pesticide-free vegetables and the factors affecting WTP in developing
countries.
Studies in developed countries include the following: Bernard and Bernard (2010) conduct
experimental auctions on subjects selected from several states in the US, including Delaware andMaryland. In their experiment, they estimate consumers' WTP for potatoes and sweet corn for four
different types: conventional, organic, pesticide-free, and non-genetically modified organisms. As
fresh produce grown without the use of pesticides can capture substantial premiums, they argue that
small farmers, in particular, should consider the profitability of not using pesticides rather than thecost incurred in obtaining the organic certification label. Gilmour et al. (2019) use a choice experimentto estimate consumers' WTP for hydroponic versus conventional lettuce. Although there was no WTP
premium for hydroponics with or without organic certification, the study is very significant because it
points out that providing consumers with a variety of information about hydroponics can change theirpreferences. In a pioneering laboratory experiment using eye tracking in Arizona in the US, Grebitus
and Loo (2022) show that consumers' cognitive and affective processes are related to WTP. In
particular, they find that WTP for pesticide-free labeling increased by an average of $0.10 per second
increase in attention, indicating that consumers are more concerned about pesticide residues than about
genetically modified foods.
On the contrary, in Japan, few studies have estimated and compared the values of organic andconventionally grown vegetables from an economic perspective. Such studies have limited themselves5to clarifying that consumers highly value organic vegetables and proposing the expansion of organic
vegetable markets. Sawaragi et al. (2002) conduct a sales experiment as well as a questionnaire survey
using CVM to extract consumers' WTP for organic agricultural products (tomato and spinach). Theirresults show that consumers' WTP for organic products is +26.6% and +14.9%, respectively, comparedto marketed products, indicating a considerable discrepancy between their awareness and their
behavior. Sato et al. (2005) estimate the value of locally and organically grown vegetables. Assumingthat a bunch of spinach produced by conventional farming methods costs 160 yen, four higher amounts
are presented (170, 175, 180, and 190 yen, respectively), and the WTP is estimated using the doublebounded dichotomous choice contingent valuation. Their estimation results show that the WTP for
spinach produced by organic farming is 19 yen higher than that of conventionally grown spinach.
Tsuge (2004) also uses the CVM to estimate the value of organic vegetables and explores measures topromote environmentally friendly agriculture by estimating the added value of vegetables producedby such farming methods. A comparison of tomatoes from conventional farming methods (4 packs)
priced at 200 yen and tomatoes from environmentally friendly farming methods (4 packs) priced
slightly higher reveals that WTP for tomatoes from environmentally friendly farming methods is 60
yen higher than that for tomatoes from conventional farming methods. In a recent study, Yang et al.
(2022) show that Japanese consumers earn the trust of environmentally friendly food products when
they get information from friends and family. Their study applies a choice experiment by gathering
samples through an internet survey.
As described above, many of the studies that have evaluated organic vegetables from an economic
perspective have been conducted in developing countries, where pesticide residue in vegetables is agreater problem than in Japan. However, even in developed countries, consumers may not feel fully
secure and assured of their safety regarding the use of pesticides in production when purchasing
vegetables. In Japan, although some studies pay attention to organic products in terms of economics,
they concentrate on the value of organic ones, not pesticide-free ones.

3 Methods
3.1 Experimental design
A preliminary (pre-) survey of residents in Sapporo, Japan, ranging from university students in their
20s to residents in their 70s, was conducted between June–July 2018, and 50 samples were collected.
We asked students attending Hokusei Gakuen University2 and their families and acquaintances tocooperate in the pre-survey. Respondents were asked about their WTP for cucumbers and tomatoes inan open-ended manner to avoid range bias. However, at the time of the pre-survey, because the average
market price for a pack of three conventionally grown cucumbers at four stores we had been scheduled
to be surveyed was 180 yen (approximately US$ 1.64, considering the exchange rate at that time), we
showed that value as a reference price. Based on the results of the pre-survey, the first bid prices in
2 This research was undertaken in part while the author worked at the Hokusei Gakuen University, Japan.

6

Table 2 Comparison of each type of farming
Type of farming

Pesticide use and its residue
Use of pesticide

Pesticide residue in the soil

Conventional

Dependent on each prefecture’s
standard*

No stipulations

Specially cultivatedUses less than half the amount ofchemical fertilizers and pesticides
compared to conventional farming
methods

No stipulations

Organic

Avoids the use of chemical fertilizers
and pesticides as much as possible

No use of prohibited pesticides or
chemical fertilizers for at least two
years before sowing or planting

Pesticide-free

Avoids the use of chemical fertilizers
and pesticides as much as possible

Highly unlikely*For example, according to the Hokkaido prefectural government (2022), the nitrogen compositions of the chemicalfertilizers used for cucumbers and cherry tomatoes are 42kg/10a and 28kg/10a, respectively. The number of pesticide
applications during cultivation ranges from 33 to 49 times for cucumbers and 23 times for tomatoes. Both of thesecounts are the highest among fruit and vegetable crops.

this survey were set at 190, 200, 210, 220, and 250 yen, in addition to the market price of 180 yen.
Similarly, for cherry tomatoes, in addition to the market price of 210 yen at the time (approximately
US$ 1.91), the first bid amounts of 230, 240, 250, 260, and 280 yen were set based on the results ofthe pre-survey. 3 Only the fifth bid was set higher for both cucumbers and cherry tomatoes because thehighest amount from multiple individuals’ pre-survey responses was extracted. In the pre-survey, only
5% of the respondents indicated that the WTP for cucumbers was between 220 yen and 250 yen,whereas no one mentioned that the WTP for cherry tomatoes was 270 yen. As pesticide-free vegetables
are generally 50% more expensive than conventionally grown vegetables in the market (National
Agriculture and Research Organization of Japan, 1997), it is reasonable to set a higher price for suchvegetables. According to the MAFF (2016), the price of cucumbers was, on average, 1.6 times higher
and that of cherry tomatoes was 1.35 times higher in the 2015-2016 survey for domestic organicallygrown vegetables compared to standard domestic products. For both vegetables, the smallest pricedifferences between standard and organically grown products were observed in summer (September),when prices were 1.04 and 1.13 times higher for cucumbers and cherry tomatoes, respectively.
The pesticide-free vegetables used in this study were cultivated by ourselves from scratch.
According to the MAFF's “Outline of Labeling of Organic Agricultural Products,” special cultivation
agricultural products refer to agricultural products grown with less than half the use of pesticides andchemical fertilizers, but labeling them “no pesticides” or “no chemical fertilizers,” respectively, isprohibited because it is misleading when sold in the market (see Table 2). This is because consumers

3 Usually, prices of summer vegetables such as cucumbers and tomatoes gradually decrease from June to August, but

in 2018, the prices of these vegetables rose in August to the same level as they were in June (see MAFF(2018)https://www.maff.go.jp/j/seisan/ryutu/yasai_zyukyu/y_sapporo/attach/pdf/index-26.pdf.).

7

Source: Google map

Fig.1 The location of the farmland

Fig.2 Farmland and compost (Photographed in April 2018).
tend to misinterpret pesticide-free vegetables to mean the absence of residual pesticides in the soil andpesticide dispersal from neighboring fields. In April 2016, unused land on the grounds of Hokusei
Gakuen University was cultivated (see Figs. 1 and 2 (left)). Compost and leaf litter generated
exclusively from food waste from the student cafeteria were used to cultivate the vegetables (see Fig.
2 (right)). Considering the possibility that food waste from the cafeteria (e.g., vegetable scraps) may
contain pesticides, we verified the suppliers and harvesting process. Although most of the vegetables
used in the student cafeteria are domestically produced, they may contain trace amounts of pesticides.
Despite negligible pesticide traces, the possibility that small amounts remain in the soil duringcomposting cannot be ruled out. Therefore, we explained to the respondents during the survey that thevegetables presented were close to being pesticide-free and significantly less likely to containpesticides. After planting seeds and seedlings, we did not use any chemical fertilizers, herbicides,
insect repellents, or other pesticides but only wood vinegar, which has insect repellent effects andfertilizer made from food waste. There were also no fields in the neighborhood where pesticides may
have been applied. As explained earlier, pesticide-free vegetables as defined in this study are8

Fig.3 Comparison with commercial (top) and pesticide-free vegetables (bottom)(Photographed in August 2018)
different from organic or special cultivation agricultural products as defined by the MAFF because wedeliberately avoided the use of pesticides and chemical fertilizers.
We explained to the respondents that the pesticide-free vegetables shown in this study weredifferent from commercially available organic produce and showed them the actual products that we
had grown (see Fig. 3). We also carefully explained to the consumers why the actual products were
somewhat inferior in terms of color and appearance. To avoid an evaluation bias, we did not informthem that we had grown the vegetables ourselves. Cucumbers and cherry tomatoes were used in thisstudy because 1) they are commonly consumed by Japanese people according to a survey conductedby the Ministry of Health, Labour and Welfare of Japan (2015); 2) they can be grown efficiently in asmall area and can thus be widely cultivated across Japan; 3) they are not directly affected by factors
other than pesticides, such as soil hardness. According to MAFF (2022c), the yield of cucumbers andtomatoes in 2021 was 5,500 and 6,360 tons per 10are, respectively, much more than that of othervegetables such as peppers (4,660 tons) and eggplants (3,600 tons). The top three prefectures for
cucumber production are Miyazaki, Gunma, and Saitama, respectively, whereas the top threeprefectures for tomato production are Kumamoto, Hokkaido, and Aichi, respectively, all of which
cultivate these crops over a wide area. Both are summer vegetables but are grown in the warmer south
during the cold season, making them available throughout the year.
In general, cucumbers are susceptible to various diseases and require treatment using fungicides
and insecticides, failing which they exhibit poor growth, deformities, and discoloration (Takii & Co.,
Ltd; 2022). The most commonly used pesticides in Japan are neonicotinoid pesticides, which may
have adverse effects on the human body. In the case of cherry tomatoes, although they appear to be
similar in color to market tomatoes, they comprise a mixture of well-colored and not-so-well-colored9tomatoes and are small in size. According to the Ministry of Health, Labour and Welfare of Japan(2009), phytohormones (4-Chlorophenoxyacetic Acid), which are often used to promote tomato
growth, improve the gloss, and produce large fruit, have been linked to adverse effects on the fetus
and possible internal organ diseases. Before and after cultivating land, we interviewed farmers from
cities and towns in the suburbs of Sapporo city (Yoichi, Rankoshi, Namporo, and Yuni town and Bibaicity) who were growing vegetables without agricultural chemicals or organically to understand theprocess of growing chemical-free vegetables.
To select supermarkets for the survey, we first randomly selected companies that sell organicallygrown vegetables from among those operating several supermarkets in Sapporo. Next, we contacted
the stores owned by companies that agreed to allow us to conduct our survey. Among the stores thatagreed to cooperate with us, four stores that were as far away from other stores as possible were chosenconsidering not only distance but also the availability of sufficient space to conduct the survey. Of thefour stores, we chose two, (A) Coop Sapporo Hondori store and (B) Aeon Asabu store, to show thepesticide-free vegetables to the respondents and two others, (C) Coop Sapporo Kawashimo store and(D) Aeon Shinkotoni store, where we did not show the pesticide-free vegetables. Owing to the longsurvey period, there was a possibility that the same person would visit the different stores, thereby
informing their neighbors about the survey. To prevent this, we took precautions to choose stores as
far apart as possible. The closest store to the Coop Sapporo Hondori store is the Coop Sapporo
Kawashimo store, which is approximately 3.1 km away by the shortest route. The closest store to Aeon
Asabu is Aeon Shinkotoni, which is approximately 7.6 km away by the shortest route. None of thestores sold cucumbers and cherry tomatoes at least 5 yen lower or higher compared to the average
market prices at the time of the survey. The survey was conducted from 9:00 am to 3:00 pm on
weekdays from August 16-24, 2018, at these four supermarkets. We distributed questionnaires to 100
shoppers at each store. There were a few days when the survey could be conducted until the evening
crowd came, but usually, the survey ended at 3:00 p.m. because conducting the survey during rush
hours would disturb shoppers. It is undeniable that the time constraints of the survey may have affected
the representativeness of the sample.
The survey method is described as follows.4 Shoppers who had paid for their purchases and were
putting their items in their bags were asked to cooperate and answer the questionnaire at a response
booth provided by the store. Depending on the store, the survey location could be a booth or just adesk and chair in a corner of the store. Before answering, shoppers were asked whether they had
recently responded to any survey with similar content, and those who said “yes” were not asked tocomplete the survey. Both conventional and pesticide-free vegetable cultivation methods were also
explained before stating answer. In particular, we explained that the conventional farming method,which is usual for vegetables that are generally available in the market, allows the use of pesticides
4 All surveys conducted in this study were subject to research ethics review by Hokusei Gakuen University inadvance. In addition, survey respondents were fully briefed on the purpose of the survey and the handling of postsurvey data before responding to the survey.

10Table 3 Number of respondents for different initial bids
Initial bid (Cucumbers/ Tomatoes)

Higher bid

Lower bid

Number (%)

190/230200/240

180/21089(26.2%)

200/240210/250190/230

79(23.1%)

210/250220/260

200/240

86(25.15%)

220/260

250/280

210/250

88(25.73%)

Total

342

and chemical fertilizers within government-determined standards. In addition, to make the respondents
aware of the current status of food waste in Japan, data related to food imports and the amount of foodwaste in Japan were presented and explained. The survey instrument covered personal attributes suchas gender, age, occupation, family structure, and household income. Next, using the information
obtained from the pre-survey, respondents were asked to check all applicable boxes regarding
environmental issues of concern (global warming, acid rain, water pollution, air pollution, waste
problems, ozone depletion, deforestation, invasive alien species problems, and others). Finally,
respondents were asked about their WTP for pesticide-free cucumbers and cherry tomatoes.5 The study
uses a double-bounded dichotomous choice (DBDC) format to estimate WTP, which is in accordancewith Hanemann et al. (1991). Each respondent was offered a random amount of money. First, a specificamount was offered; if the respondent was willing to pay that amount, a higher amount was offered;if the respondent was not willing to pay the first amount, a lower amount was offered. Those who were
not willing to pay the amount offered both times were asked the reason for their unwillingness, andrespondents who checked the option corresponding to the protest responses were excluded. Aftercompleting the questionnaire, respondents were given chopsticks as a reward. Table 3 shows thedifferent initial bid values and the bid value setting after each initial bid value. The initial bid values
are 190, 200, 210, and 220 yen for cucumbers and 230, 240, 250, and 260 yen for cherry tomatoes,
and the proportion of shoppers who were shown each initial bid is approximately 25% for each store.
3.2 Data and descriptive statistics
The number of valid responses obtained from each store varied somewhat but could be estimated using
approximately equal numbers of observations (Table 4). Table 5 shows the descriptive statistics. Of
the 342 responses, 278 were women and 64 were men, with women accounting for 81% of the total.
More than half of the respondents were in their 60s or older (58.8% of the total), and by occupation,
most respondents were homemakers (44.2%), followed by unemployed individuals (22.8%). The factthat most of the shoppers were women who were full-time homemakers could be attributed to the timeof day when the survey was conducted. The most common family composition was a two-personhousehold, accounting for 44.7% of the total. From the above, it can be assumed that most shoppers
5 The full survey questionnaire is available from the author upon request.

11

Table 4 Number of valid responses collected at each store
Store

Freq.

Percent

A

73

21.35

B

87

25.44

C

88

25.73

D

94

27.49

Total

342

100.0

Table 5 Definitions and sample statistics of the variables
Variable

Description

Mean

Std. Dev.

Min

Max

Gender1 if the respondent is a woman, 0 for a
man

0.791

0.406

0

1

Age

Age of the respondent

61.36

16.57

15

85

Family size

Number of family members living with
therespondent(including
therespondent)

2.556

1.217

1

8

IncomeHousehold income, in 10,000 yen

413.8

222.1

200

1,000

0.468

0.027

0

1

3.181

1.951

0

9

Show
Environment

1 if the pesticide-free cucumbers andtomatoes were shown to the respondent,
0 otherwise
The number of environmental issues
that concerned the respondent

were older adult couples. As for household income, the largest number of respondents reported
household incomes between 2 and 4 million yen (36.8% of the total), followed by those who reported
incomes between 4 and 6 million yen (23.7% of the total). The average annual income of shoppers
was 4.243 million yen, slightly higher than the average annual income in Sapporo in 2018, which was
3.149 million yen. Finally, shoppers were asked to select all of their concerns from a list of ninedifferent environmental issues, including others. The average number circled was 3.2, with global
warming being the most selected and acid rain being the least selected. Table 6 summarizes DBDC's
WTP answer patterns and environmental issues of interest. In the case of cucumbers, the approvalrates for those offered 190, 200, 210, and 220 yen at the first bid were 85.4%, 77.2%, 72.1%, and69.3%, respectively. In the case of cherry tomatoes, the approval rates for those who were offered 230,
240, 250, and 260 yen at the first bid were 78.7%, 75.9%, 73.3%, and 55.7%. Respondents who agreed
to pay even once were asked why they accepted the rate. The most common response was “feels safe
and secure,” at approximately 56% for cucumbers and 48% for cherry tomatoes. The next mostcommon response was “seems good for my health,” at approximately 12% for cucumbers and 13%
for tomatoes. Six respondents who chose “concerned about the farming methods of the pesticide-freevegetables” were considered protest responses because they did not have any WTP. In addition, there
were 20 non-responsive individuals and 32 incomplete (partially blank) responses, resulting in a final
12

Table 6 Means of the variables by the distribution of responses
Variable

No-No

No-YesYes-NoYes-YesGlobal warming

40

36

61

183

Acid rain

5

3

15

43

Water pollution

11

6

25

83

Air pollution

22

17

29

108

Waste

18

22

35

123

Ozone layer

10

11

9

60

Deforestation

11

6

18

67

Alien species

13

9

20

62

Other

0

1

0

4

total of 342 responses used in the estimation.
Owing to the limited space, had the survey been conducted with and without the display ofvegetables at the same store, respondents who were classified as having not been shown the pesticidefree vegetables may have seen them unintentionally. There are other adverse effects of simultaneously
surveying respondents in the same store with and without a display of pesticide-free vegetables. For
example, because the survey was conducted in an open space that was visible to shoppers, if there
were customers who came to shop every day, there was a possibility that they would see the pesticidefree vegetables even if they declined the survey. Accordingly, if they participated at a later date andwere classified as not having seen the pesticide-free vegetables, their WTP would include bias. To
eliminate these possibilities, we separated the stores that showed the vegetables to the respondents
from those that did not. However, in such cases, a difference in the population of respondents is likely.
Therefore, we conducted a Welch's t-test focusing on age and household income, which are most likely
to affect WTP between the samples in the “show” and “no-show” cases. The t-value for age was 0.8955 and that for household income was 0.8838. The P-value for age was 0.3712 and that forhousehold income was 0.3774, indicating that the null hypothesis could not be rejected and that themean values of age and household income were not statistically significantly different between thetwo groups.

4 Empirical specification
The double-bounded model was developed by Hanemann et al. (1991). Since then, many studies haveapplied the model to assess the value of an environmental amenity. Assuming that the WTP function
is linear, respondent i’s WTP is expressed by the following equation:
𝑊𝑇𝑃 (𝑥 , 𝑢 ) = 𝑥 ′ 𝛼 + 𝑢 ,13

where 𝑥 is the vector of explanatory variables, 𝛼 is a vector of parameters, and 𝑢 is an error term
assumed to be normally distributed with mean 0 and standard deviation σ. Respondents are asked twoquestions about whether they accept the first bid 𝐵𝑖𝑑 as well as the follow-up 𝐵𝑖𝑑 . Based on thesetwo questions, four possible intervals can be constructed for WTP as follows.
1. If a respondent i answers Yes to the first bid and No to the second bid, then 𝐵𝑖𝑑 ≤ 𝑊𝑇𝑃 < 𝐵𝑖𝑑 .
2. If a respondent i answers Yes to both first and second bids, then 𝐵𝑖𝑑 ≤ 𝑊𝑇𝑃 < ∞.
3. If a respondent i answers No to the first bid and Yes to the second bid, then 𝐵𝑖𝑑 ≤ 𝑊𝑇𝑃 < 𝐵𝑖𝑑 .
4. If a respondent i answers No to the first and second bids, then 0 < 𝑊𝑇𝑃 < 𝐵𝑖𝑑 .
The probability of each of the four cases is given as follows (Haab and McConnell, 2002; Hanemannet al., 1991):
𝑃𝑟( 𝐵𝑖𝑑 = 𝑦𝑒𝑠, 𝐵𝑖𝑑 = 𝑛𝑜) = 𝑃𝑟(𝐵𝑖𝑑 ≤ 𝑊𝑇𝑃 ≤ 𝐵𝑖𝑑 ) = 𝐺(𝐵𝑖𝑑 ; 𝛼) − 𝐺(𝐵𝑖𝑑 ; 𝛼)(1)𝑃𝑟( 𝐵𝑖𝑑 = 𝑦𝑒𝑠, 𝐵𝑖𝑑 = 𝑦𝑒𝑠) = 𝑃𝑟(𝑊𝑇𝑃 ≥ 𝐵𝑖𝑑 ) = 1 − 𝐺(𝐵𝑖𝑑 ; 𝛼)(2)𝑃𝑟( 𝐵𝑖𝑑 = 𝑛𝑜, 𝐵𝑖𝑑 = 𝑦𝑒𝑠) = 𝑃𝑟(𝐵𝑖𝑑 ≤ 𝑊𝑇𝑃 < 𝐵𝑖𝑑 ) = 𝐺(𝐵𝑖𝑑 ; 𝛼) − 𝐺(𝐵𝑖𝑑 ; 𝛼)(3)𝑃𝑟( 𝐵𝑖𝑑 = 𝑛𝑜, 𝐵𝑖𝑑 = 𝑛𝑜) = 𝑃𝑟(𝑊𝑇𝑃 ≤ 𝐵𝑖𝑑 ) = 𝐺(𝐵𝑖𝑑 ; 𝛼),(4)where 𝐺(𝐵𝑖𝑑, 𝛼) represents the cumulative density function. If there are N respondents, the loglikelihood function takes the form
where G ( B i d ,  ) represents the cumulative density function. If there are N respondents, the loglikelihood function takes the form𝑙𝑛 𝐿 =

where, 𝑑 ,𝑑{𝑑𝑙𝑛 1 − 𝐺(𝐵𝑖𝑑 ; 𝛼) + 𝑑+𝑑𝐺(𝐵𝑖𝑑 ; 𝛼) − 𝐺(𝐵𝑖𝑑 ; 𝛼) + 𝑑,𝑑, and 𝑑⋅ 𝐺(𝐵𝑖𝑑 ; 𝛼)𝐺(𝐵𝑖𝑑 ; 𝛼) − 𝐺(𝐵𝑖𝑑 ; 𝛼) },are indicator variables that take the value of 1 or 0 corresponding to

the response probabilities given by Equations (1)-(4).
The estimation results are as shown in Table 7. The coefficients for age are positive andsignificant at the 1% level for both cucumbers and cherry tomatoes. This indicates that older people
have higher WTP. The coefficients for gender and income are not significant for both cucumbers andcherry tomatoes. The coefficients for the dummy variable (Show), which takes a value of 1 for thevegetables being shown, are likewise not significant. This means that showing pesticide-freevegetables that were not colored or shaped well did not affect respondents’ WTP. In other words, therespondents were not particular about the appearance of the vegetables so long as they were pesticide14

Table 7 Estimation results
Cucumbers

Cherry tomatoes

Variables

CoefficientS.E.

p values

CoefficientS.E.

p values

Age

0.567***

0.138

0.000

0.815***

0.203

0.000

Gender

2.745

5.429

0.613

6.076

7.667

0.428

Income

0.009

0.010

0.399

-0.002

0.014

0.864

Show

-3.518

4.396

0.423

-8.271

6.120

0.177

Environment

2.194*

1.217

0.071

3.616**

1.690

0.032

Constant
Mean WTP(Japanese yen)
Log-likelihood

184.635***

11.5930.000

208.653***

16.7630.000

226.58***270.38***-361.339-334.944

Wald statistic

22.08

23.54

Sample size

342

342

The estimated coefficient is significant ∗at the 10% level; ∗∗at the 5% level; ∗∗∗at the 1% level.

free. This is a very important result derived from consumer preferences for reconsidering the use ofpesticides on agricultural products in Japan. Finally, the coefficients for concern regarding
environmental issues are significant at the 10% level for cucumbers and 5% level for cherry tomatoes.
This indicates that knowledge about environmental issues positively affected respondents’ WTP. In
addition, the WTP was 227 yen for cucumbers and 270 yen for cherry tomatoes, only 47 yen and 60
yen higher, respectively, than the prices of conventionally grown vegetables sold in the market. This
result is similar to that of Tsuge (2004), who found that the price of organically grown tomatoes was
60 yen higher than the market price. On the contrary, the results of this study showed that the pricesof cucumbers and cherry tomatoes are 26% and 29% higher, respectively, than conventionally grownvegetables, which is lower than the 50% higher price of organic vegetables compared toconventionally grown vegetables, as indicated by the National Agriculture and Research Organizationof Japan (1997) results mentioned earlier.

5 Concluding remarks
This study uses a DBDC method to examine WTP for vegetables grown without pesticides; two stores
displayed pesticide-free vegetables to shoppers, whereas the other two did not. The results showedthat shoppers were willing to pay more for pesticide-free vegetables, regardless of whether they wereshown the slightly inferior shape and color of the pesticide-free vegetables compared to cucumbers
and cherry tomatoes produced using conventional farming methods. Although it has been pointed outthat Japanese people tend to be overly concerned about the appearance of vegetables, which has led to
substandard vegetables being discarded and food loss problems, the results of this study indicate thatshoppers are not concerned about the appearance of pesticide-free vegetables. Given that consumers
15

are willing to pay a premium of approximately 30% of the price of conventionally grown vegetables
for pesticide-free vegetables, the WTP for organic vegetables could be less than that. Furthermore, theresults of this study also revealed that those who are more concerned about environmental issues havea higher WTP. It has long been asserted that consumers in Japan are less environmentally conscious
than consumers in other countries, and this trend has not changed to this day (Boston Consulting Group,2022). If consumers become more concerned about environmental issues and focus on food loss, they
may choose pesticide-free vegetables more than they do now. Indeed, according to the Consumer
Affairs Agency of Japan (2020), the most common reasons given for purchasing substandard
vegetables are low prices and not caring about appearance. However, these are substandard vegetablesfrom among the conventionally grown vegetables, which contain pesticide residues but aresubstandard because of their poor appearance and are hence sold at low prices. The key is to understandhow to distribute pesticide-free vegetables, which are grown without the use of pesticides or chemicalfertilizers and therefore appear inferior compared to conventionally grown vegetables but are more
expensive because of the time and effort required.
This study’s findings indicate that enhancing consumers’ awareness of environmental issues canbe an effective measure for the distribution of pesticide-free vegetables. Consumers must be madeaware that pesticides and chemical fertilizers are used on conventionally grown vegetables to makethem look good. In addition, they should know the importance of carbon farming, which involves
fixing atmospheric carbon dioxide and maximizing the use of fungi and microorganisms in the soil
and does not rely on pesticides and chemical fertilizers. Hokkaido is the most agriculturally active
region in Japan, but most of the soil in Hokkaido is black soil, a type of volcanic ash, which requires
chemical fertilizers. However, it has been demonstrated in Hokkaido that nutrients in the soil can be
secured without the use of chemical fertilizers (Onodera and Nakamoto, 2007), and there may be somevalue in experimenting with cultivation methods that do not affect the environment or the human body.
Even now, the number of farmers growing organic and pesticide-free vegetables in Japan is minuscule.
As Britwum and Yiannaka (2019) point out, producers should understand the demographic
composition of their target consumers and reflect these preferences in their vegetable production
methods. Such attempts will expand the market of vegetables that less affect the environment or humanhealth and reduce their dependence on pesticides and chemical fertilizers. As a result, those changes
could decline out-of-specification vegetables and consumers' food loss that is occurred discarding
edible parts of vegetables.
It is important for the government to focus not only on reducing the physical amount of food loss
but also on motivating consumers to choose more environmental friendly products and reduce
substandard vegetable waste by understanding their preferences and raising their environmental
awareness. Furthermore, more efforts are needed to expand the market for pesticide-free vegetables
by encouraging producers to shift to production methods that do not use pesticides and chemicalfertilizers and providing subsidies to help lower production costs. For example, the Japanese
government should immediately consider measures to support the purchase of more expensive but
16

safer vegetables for low-income consumers in Japan, by referring to the Supplemental Nutrition
Assistance Program (SNAP) that allows low-income households in the US to buy organic food.
Although the study findings provide substantial evidence of consumers’ WTP for pesticide-freevegetables, they are subject to certain limitations. The first is that the sample is not representative of
the Japanese population, and the respondents of this study are, on average, older citizens. To insist on
the importance of expanding the pesticide-free vegetable market, it would be necessary to conduct asurvey questionnaire nationwide in Japan. Another limitation is the hypothetical nature of theexperiment, which can raise concerns about hypothetical bias, that is, the concern that WTP may beoverestimated. In particular, the respondents who were concerned about pesticides or chemicalfertilizers may have chosen “Yes” in response to the price shown in the questionnaire but may opt for
conventionally grown vegetables that are cheaper, especially when facing budget constraints. This canpotentially bias results. However, as we explained the differences between conventionally grown,organic, and pesticide-free vegetables and elaborated on pesticide use before distributing thequestionnaires to the respondents, the hypothetical bias is expected to be minimal. Regardless, asmentioned by Meyer (2020), applying virtual reality technology to eliminate various constraints in onsite surveys can help avoid the biases inherent in the CVM. These issues should be the subject of future
research.

Acknowledgment
This study, in part, was supported by the Environment Research and Technology Development Fund(JPMEERF20S11821) of the Environmental Restoration and Conservation Agency of Japan. I am also
grateful to my seminar students at the time who cooperate with this study, especially Keiichiro Ito(representative of the seminar).

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