1. Introduction
A critical attribute of food safety is pesticide residue [
1]. Using chemical pesticides can significantly increase food production and improve agricultural efficiency, but it also causes damage to the natural ecological environment and the quality and safety of agricultural products [
2]. The overuse of chemical pesticides can lead to the rapid growth of resistance in target pests, as well as serious impacts on non-target organisms, for example, endocrine disorders in rats, birds, and fish [
3]. Pesticide residues can spread throughout the environment, contaminating different ecosystems and damaging food and water resources. Examples include high nitrate levels in groundwater, reduced soil fertility, and increased greenhouse gas emissions [
4]. Chemical pesticides are considered to be one of the most prominent barriers to agricultural sustainability [
3]. Pesticide risk reduction is at the top of many countries’ policy agendas, but most have failed to meet their targets [
5]. Existing policies often fail to promote widespread adoption of pesticide-free production practices due to the lack of cost-effective alternatives [
6]. The vigorous development of organic agriculture is one approach to addressing the problem of agricultural products quality and safety [
7]. Organic certification requires attributes such as no chemically synthesized fertilizers, pesticides, growth regulators, or other substances, and no pesticide residue, growth hormones, or genetic engineering [
8].
In China, the organic food market is rapidly expanding and has reached a considerable size. Nonetheless, the share of available organic food remains small [
9]. According to the Global Organic Agriculture Statistical Yearbook 2020, global sales of organic food and drinks exceeded EUR 95 billion in 2018. Of this, China’s organic food sales were EUR 8.1 billion, accounting for only 8.3% [
10]. Organic farming production in China necessitates a 3-year conversion period and increased labor expenditure [
11]. Despite the potential premium, organic agricultural products incur higher production costs than conventional agricultural products and require significant investment, which many Chinese small- and medium-sized businesses (SMEs) cannot afford [
12]. For consumers, the high cost of organic production leads to higher prices for organic agricultural products, which has hindered many consumers from buying [
13].
Large-scale reductions in pesticide use in the context of unfavorable food production require more innovative and flexible systems to complement organic farming [
14]. Pesticide-free production standards, which combine the strengths of all food value chain players, may be the cornerstone of this shift [
15]. In Switzerland, the IP-SUISSE producer organization is introducing a nonorganic, private–public standard for pesticide-free wheat production [
15]. Studies have demonstrated that the pesticide-free attribute is the most important aspect of consumer interest when purchasing organic produce [
16,
17]. The study by Britwum, et al. [
18] on consumers’ perceptions regarding the desired attributes of organic produce found that consumers place the highest importance and confidence in the “free of growth hormones” and “free of synthetic pesticides” aspects of organic labeling. For Chinese consumers, purchasing organic agricultural products is motivated more by concerns regarding food safety and personal health and less by environmental protection [
19,
20]. Generally, institutional pesticide-free certification is less difficult and less costly to achieve than certified organic labeling. Do consumers prefer separate pesticide-free information? If consumers are willing to pay for separate pesticide-free information, SMEs can use such certification without assuming the prohibitive expenditure of converting to organic operations. For SMEs, pesticide-free information could offer a strategic alternative to give farmers a competitive advantage. Consumers will then be able to buy healthy and safe products at a lower cost. Hence, investigating consumers’ preferences and willingness to pay (WTP) for organic labels and pesticide-free information will directly affect agricultural certification decision-making.
A series of studies have been conducted on consumers’ preference, WTP, and the influencing factors of organic labels [
13,
21,
22,
23,
24]. Regarding how consumers perceive pesticide-free attributes, scholars believe that previous research has not been systematic and in-depth enough [
18,
25]. Bernard and Bernard [
26] examined the WTP for two core attributes of organic labeling (pesticide-free and non-GMO), finding that consumers were willing to pay for the pesticide-free information. By contrast, Edenbrandt [
25] surveyed Danish consumers and found that pesticide-free information was less important to consumers than the organic label, indicating that Danish consumers preferred to buy organic produce. These contradictory findings warrant further investigation.
Tea is one of the three most recognized drinks worldwide. China is the largest tea-producing country and a major tea-consuming and exporting country in the world [
27]. Green tea production accounted for 61.70% of the total tea production in 2020. The export volume of green tea is 293,400 tons, accounting for 84.1% of China’s total tea exports [
28]. With consumers’ increasing concerns regarding the quality of life and the rising threshold of international trade in tea, the production of organic green tea represents an important approach for enhancing the competitiveness of green tea in China, promoting green tea export, and expanding domestic demand for green tea. Existing literature focuses on the organic consumption behavior of milk [
29,
30,
31], rice [
32], and other crops [
33,
34], but there are fewer studies on the organic consumption behavior of tea [
35]. Thus, green tea was chosen as the experimental subject in this study.
The choice experiment (CE) method can estimate consumers’ preferences for different product attributes and assess the relationships between attributes. It avoids the limitations of the contingent valuation method that can only measure a single attribute of a product [
35]. Based on the above background, taking green tea as an example, this study applies the CE method to analyze the following questions: (1) Under current conditions, do Chinese consumers have a preference and WTP for organic and pesticide-free labels? (2) Are pesticide-free labels valid in comparison with organic labels? (3) What are the factors that influence consumers’ WTP for organic and pesticide-free labels? This study can provide valuable information for market expansion and marketing of organic agricultural products and also reduces the degree of information asymmetry between SMEs and consumers, providing a reference for SME producers to control production costs.
3. Results
3.1. Socio-Demographics of Consumers
Table 3 presents the socio-demographics of the respondents. Among the final sample of 430, there was a slightly higher number of female respondents (54.46%) than male ones (45.54%). This is consistent with some previous studies wherein females are the primary household buyers [
58]. Respondents aged 25–34 years hold the largest share (59.90%), followed by those aged 35–44 years (16.34%). Although middle-aged consumers are the main buyers of green tea, the rise of younger consumers cannot be ignored. The married samples were predominant, and most of them had some college or a bachelor’s degree. Respondents with a monthly household income of 14,000 RMB and above occupied the largest proportion (30.94%), followed by those with 10,000–11,999 RMB and 12,000–13,999 RMB monthly household income. The higher monthly income and education may be because the study targeted consumers who had purchased green tea. According to Chen, et al. [
59], tea consumption is positively correlated with consumers’ income. Almost all of the respondents had more than three people living together. Additionally, 70.3% and 54.21% of the respondents had children aged 12 and below and elderly aged 65 and above, respectively. In terms of tea consumption frequency, the percentage of respondents who purchased green tea once every 1–2 months was 68.56%.
3.2. Main Effect
Using the mixed logit model, this study set price and its cross terms as fixed parameters, and other attribute variables are set as random parameters. The log-likelihood values of the mixed logit model (−1629.2003 and −1619.7091) indicate that the regression results are generally significant.
Table 4 presents the results of the mixed logit model. In the main effects model, the parameters of the selected attributes are regressed to elicit the consumer preferences for attributes of the organic label, pesticide-free label, regional brand, and national brand. The results of the model estimation show a log-likelihood of −1629.2003, and the regression results are generally significant. The specific alternative constant ASC is significantly negative at the 1% level, indicating that choosing “neither A nor B” has a negative effect on consumer utility when compared with the combination of green tea attributes offered in the study. All of the green tea attribute combination options offered in this study could increase consumer utility. Price is negative and significant at the 5% level, indicating that consumers prefer lower-priced products. The higher the price of green tea, the more negatively it affects consumer utility. The three organic, pesticide-free, and national brand labels are significantly positive at the 1% level, indicating that consumers hold a positive preference for these three labels. The parameter estimation of different labels reveals that consumers have the highest preference for the organic label (1.282), followed by pesticide-free label (0.662) and national brand (0.459).
In the main effect with the interaction model, the variable “ORG × PEST” is significantly negative at the 10% level, indicating that there is a substitution effect between the organic label and pesticide-free label. The variables “ORG × NAB” and “PEST × NAB” are significantly positive at the 10% level and the 1% level, respectively. When the organic label or the pesticide-free label is attached to the national brand, consumers’ utility is enhanced.
3.3. Main Effect with Interaction in Trust
This section investigates the conjoint effect of trust in the organic and pesticide-free with the given attributes. Two averaged indices in
Table 2 were used in a conjoint regression. The results are shown in
Table 5.
The interaction term between organic trust and the organic label and regional brand is significantly positive. This indicates that the more consumers show trust in organic labels, the more they prefer organic labels and regional brands.
The interaction term between pesticide-free trust and the organic label, the pesticide-free label is significantly positive. This indicates that those who trust in pesticide-free will prefer organic labels too. Pesticide-free is an important attribute of organic labels. The interaction term between pesticide-free trust and the regional brand is significantly negative.
3.4. Heterogeneity Analysis Considering Other Consumer Factors
Heterogeneity exists in consumer preferences for organic and pesticide-free labels. To analyze the sources of heterogeneity, interaction terms of socio-demographics and consumption habits with each attribute of green tea were introduced in the model.
Table 6 presents the results.
Considering socio-demographics, sex, household size, and income have a significant impact on the preference for organic labels. The “education × PEST” variable is significantly positive, while the “elder × PEST” variable is significantly negative. This implies that green tea with a pesticide-free label could attenuate the utility of consumers with elderly people over 65 years of age at home. The “income × RGB” and “children × RGB” are significantly positive, indicating that higher income consumers and those who with children under 12 years of age at home are more likely to buy green tea with a regional brand. Conversely, female consumers are more likely to buy green tea from a national brand. In addition, females, older, bigger household sizes, and consumers with children under 12 years of age at home are rather to choose the opt-out option. They might tend to keep the status quo.
3.5. Willingness to Pay
WTP can directly reflect the change in consumer utility when each attribute changes. The Hierarchical Bayes (HB) approach [
60,
61] was introduced in this study. Estimations were computed in Stata 16.0 using the command Bayesmixedlogitwtp developed by Baker [
62]. Some studies have already used HB to estimate discrete choice models [
63,
64].
Table 7 shows the results.
In terms of magnitudes, Chinese consumers have highly valued the organic label, with a mean WTP of 148.9 RMB/500 g among all attributes. Chinese consumers also showed a positive preference for the pesticide-free label with a mean WTP of 87.1 RMB/500 g. The reason may be that compared to pesticide-free labels, organic labels include not only food safety attributes (e.g., “no pesticide residue”) but also environmental value attributes (e.g., “good for biodiversity” and “low pollution”) [
65]. In addition, the mean WTP for a national brand is 40.6 RMB/500 g.
Relative to the market price (101 RMB/500 g), the premium for the organic label reached 47.43%. In real life, the price premium of organic green tea over conventional green tea is approximately 50%, indicating that the WTP for organic green tea must be further improved.
4. Discussion
Chinese consumers’ demand and preference for safer food have increased significantly because of health concerns [
19]. This study confirms that both organic and pesticide-free labels can increase Chinese consumers’ perceived utility. This finding is consistent with other studies [
66,
67], i.e., Chinese consumers have a positive preference for organic food. Organic labels contain not only health and safety attributes but also eco-attributes, such as being environmentally friendly. As society evolves and consumer environmental awareness rises, a growing number of Chinese consumers are motivated by environmental beliefs when buying organic products [
68]. Researchers have compared consumer preferences for organic and pesticide-free labels in previous studies. Bernard and Bernard [
26] examined consumers’ preferences and WTP for organic, pesticide-free, non-GMO, and general products. They found no significant difference in consumer preferences between the organic label as a whole and its parts, and a strong substitution relationship between the whole and its parts. Consumers’ WTP for the organic label as a whole is found to be greater than the WTP for each part individually. Grebitus, Peschel, and Hughner [
37] examined U.S. consumers’ preferences and WTP for pesticide-free labels using Medjool dates, finding that U.S. consumers had positive preferences for pesticide-free labels and were willing to pay more. By contrast, Edenbrandt [
25] used rye bread as a subject, asserting that the pesticide-free label was not valuable and that people would only buy organic bread. This study demonstrates that the pesticide-free label is considered valuable on its own by Chinese consumers. The possible reason for this result is health concerns. Roos and Tjarnemo [
69] noted that consumers were more concerned with attributes related to personal interests than other long-term benefits. Thogersen, et al. [
70] confirmed that the positive attitude of Chinese consumers toward organic food is primarily motivated by consumers’ concerns regarding the health value of organic food. Farias [
71] demonstrated that the level of information on pesticide-free labels affected consumer preferences. As Chinese consumers become increasingly concerned about food quality and safety and health benefits, the pesticide-free label presents pesticide-related information more directly and visibly than the organic label, so that consumers have a clearer understanding of the quality and value of pesticide-free products. To sum up, both organic and pesticide-free labels have heterogeneous consumer groups and should be targeted to build markets according to their different attributes.
In real life, merchants will attach labels or additional features to goods to enhance the utility of the product itself and further gain more profits [
72]. However, there is no unanimous conclusion in the academic community as to whether multiple labels necessarily enhance the utility of a product. Wang, et al. [
73] proposed that consumers have a higher willingness to pay for food with both organic food and drug-free labels than organic food alone. The reason is that the more labels a food has, the more likely consumers believe the food is safer. The same idea also appears in Gabaix and Laibson [
66,
74] and Bertini, et al. [
75] who propose that based on the quantity effect, consumers always perceive products with more attributes as superior to fewer attributes. However, Meas, et al. [
76] proposed that whether more or fewer labels are better is not in the quantity but in the interaction between labels. He classified the interactions of labels into complementary effects and substitution effects. Several previous studies have shown a strong substitution effect between organic and pesticide-free labels [
26]. The finding of this study is consistent with them. The organic label also contains the attribute of no pesticide residues, and there is a partial overlap in reflecting the value of the product; therefore, the overall value estimate for both labels will be less than the sum of the value estimates for the individual labels. Therefore, both labels need to be examined carefully and labeling decisions should not be based solely on the cost-benefit profile of a single label. In addition, this study also found a significant positive interaction effect between national brands and both organic and pesticide-free labels, showing strong complementary effects. According to Parguel et al. [
77], brands can also act as a quality signal, and a high level of brand equity can represent a high level of product quality. National brands have higher visibility and better brand images than regional brands, and they can reflect the food quality from another perspective. When they are put together with the organic labels or pesticide-free labels, it does produce a one-plus-one effect. Compared with weak brands, strong brands are more likely to benefit from organic or pesticide-free labels. Therefore, well-known Chinese tea companies are encouraged to participate in organic label certification and to develop organic agriculture.
Consumers’ trust in labeling is also a new issue in the area of study [
78,
79]. The interaction terms demonstrated consumer trust has a positive effect on enhancing label preferences. This finding is consistent with those of studies [
32,
80]. In an earlier study, Yin, et al. [
81] revealed a large level of consumer distrust in organic labels; however, in recent years, with the continuous promotion of the Chinese government and the market, consumer perceptions of organic labels have increased significantly. There is also a deeper understanding and awareness of the connotations of organic labels, which also drives consumer preference for pesticide-free labels. This study also examined the role of socio-demographics in choice. Age, marriage, and green tea purchase frequency had almost no effect on the purchase of green tea. Consumers who were female, had high income, had a large household size, and had elderly above 65 years old at home were more likely to purchase organic green tea. Those with higher education were more willing to purchase pesticide-free green tea. Females, older, larger household sizes, and consumers with children under 12 years old in the household were more likely to maintain the status quo. However, socio-demographics alone are not sufficient to explain the differences in consumer behavior and more intrinsic factors such as consumer psychology should be considered [
82].
This study has some research limitations. First, the CE method used provides consumers with a given product profile, and consumers who are not price sensitive may bias the results, which can be further demonstrated in the future by incorporating methods such as random Nth-price auction experiments. Second, China is the largest tea-producing country, with significant tea export and trade. To meet the expectations of different countries, tea producers will often put organic labels of other countries on their packaging, such as the EU, Japan, or Brazil; hence, the type of label preferred by consumers is also a potential consideration for future study.
5. Conclusions
This study focused on consumer preferences for organic labels and pesticide-free labels among Chinese consumers. The research chose green tea, a real product in the organic market to conduct the CE. It was confirmed that Chinese consumers have preferences for organic labels, pesticide-free labels, regional brands, and national brands. The highest premium for selected attributes was about 39.83% for organic labels, followed by pesticide-free labels (20.58%), and national brands (14.26%). In addition, this study also confirmed a substitution effect between the organic labels and pesticide-free labels; a complementary effect between organic labels and national brands, pesticide-free labels, and national brands. Trust was considered and found that consumers with higher scores in trust preferred green tea with organic labels or the regional brand. The socio-demographics were used to analyze the heterogeneity in consumer preferences. Female and consumers with higher income prefer organic green tea, and consumers with higher education prefer green tea without pesticide residues. Household size and whether there are elderly above 65 or children under 12 in the family also affect the preference. Conversely, age, marriage, and green tea purchase frequency have almost no effect on green tea purchase.
The findings of this paper yield several practical insights. First, considering that the pesticide-free label is not currently in use, such labeling may offer a viable alternative to effectively reduce the costs paid by SMEs for organic certification. For marketers, knowing consumers’ preferences for pesticide-free attributes can also improve marketing strategy. For example, in certain markets, product packaging may consider using a pesticide-free label. Second, consumers have shown a highly positive preference for organic green tea, especially for when the organic label is placed alongside a national brand. Tea producers of well-known brands are encouraged to shift to sustainable production and organic certification to generate profits. Finally, trust is something that can contribute to the growth of organic green tea consumption. The government should adopt a responsible attitude and strengthen monitoring efforts to reduce food scandals, thus increasing consumer trust in organic food.