International trade implications for consumer attitudes to New Zealand food attributes

Abstract

Price premiums for New Zealand’s exported agricultural products can be achieved through the inclusion of credence attributes. This paper aims to test the value of price premiums in international markets for agri-food products. This is achieved using partial equilibrium trade modelling (the Lincoln Trade and Environment Model (LTEM)) to evaluate the impact on producer returns from world markets. Firstly, a profile of each of the focus export markets is presented, which are used to inform the modelling exercise. The structure and coverage of the LTEM, as well as the modelling approach used to estimate the impact of consumer preferences for credence attributes, are outlined. Results show that overall the total impact of increasing the standard of any attribute from ‘minimum’ to ‘improved’ is positive for New Zealand producer returns, with the highest overall increases shown for raising ‘animal welfare/biodiversity’ attributes.