Consumers’ willingness to pay for functional rice: A survey from Indonesia

Abstract

Rice, especially the pigmented varieties, contains a higher level of melatonin (N-acetyl-5-methoxytryptamine), which is used in treatment for sleeping disorders and for improving mood. It has potent antioxidant properties, anti-obesity, and anti-inflammatory, thus potential as the basis for functional food development. The purpose of the study was to examine how the various rice attributes and demographic characteristics affect the willingness to pay of Indonesian consumers on functional rice. Multi-Factor Categorical Design (MFCD) and Balanced Incomplete Block Design (BIBD) have been used to study multiple non-quantitative factors, including different rice varieties and health benefits information on the label (x1, 3 levels: white rice, brown rice-label, and red rice-label), price (x2, 2 levels: low and high), and rice producers (x3, 3 levels: international brand, established national brand, and new national brand). Data collection was administered through an online questionnaire survey to 204 respondents, living in four major Indonesian islands: Java, Bali, Sumatra, and the Moluccas. The results showed that despite the health benefits of the melatonin contained in the whole brown and red rice, Indonesian consumers still preferred conventional white rice over the aforementioned rice varieties. Price was recognized as the main attribute affecting the selection of functional rice, whilst rice producers gave less impact on willingness to pay. The results indicated that cultural value, consumers’ knowledge of melatonin, consumers’ health status, and consumers’ income were the sources of heterogeneity in consumers’ willingness to pay for functional rice. © 2020 The Authors. Published by Rynnye Lyan Resources.