Preference and Willingness to Pay for Imported Rice in Nigeria: Price-Quality Differentials as an Alternative
Explanation for Consumers’ Inertia

Uchenna Obih and Dr. Lloyd J.S. Baiyegunhi
Discipline of Agricultural Economics, University of KwaZulu-Natal

 

Abstract

Consumers’ persistent preference and willingness to pay higher prices for imported rice despite recent improvements in the quality attributes of local rice has been a drain on Nigeria’s foreign exchange (Forex) reserves and threat to the development of the domestic rice industry. This study attempts to explain this consumers’ choice behaviour. Binary logistic models were estimated using a 2014 dataset collected from a survey of 460 rice consumer households in the Federal Capital Territory (FCT) of Nigeria. Results show that price, age, income and consumers’ quality perception significantly influence consumers’ preference and willingness to pay for imported rice in order to avoid local rice. Consumers’ inertia against preference and willingness to pay (WTP) for imported rice persists because of negative price-quality differentials gap between local and imported rice brands. Implications of these findings for the development of Nigeria’s rice marketing policy are discussed.Download the full article