Mediation and moderation in food-choice models: a study on the effects of consumer trust in logo on choice

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ContentslistsavailableatScienceDirect

NJAS

-

Wageningen

Journal

of

Life

Sciences

j ou rn a l h o m e p a g e :w w w . e l s e v i e r . c om / l o c a t e / n j a s

Mediation

and

moderation

in

food-choice

models:

a

study

on

the

effects

of

consumer

trust

in

logo

on

choice

R. Zanoli

a,∗

,

S. Naspetti

a

_,

_M.

_Janssen

b

_,

_U.

_Hamm

b

a_Università_Politecnica_delle_Marche b_University_of_Kassel

a

r

t

i

c

l

e

i

n

f

o

Articlehistory:

Received16February2014

Receivedinrevisedform1October2014 Accepted16January2015

Availableonline12March2015

Keywords: willingness-to-pay WTP-spacemodels Mediationanalysis Moderationanalysis Consumertrust Labelling Organicfood

a

b

s

t

r

a

c

t

Thepaperintroducesawaytoanalysetheinﬂuenceofmediatingandmoderatingvariablesonwillingness topayinasimpleway.Usingdataon427Italianconsumersregardingdifferentorganiclogos,mediation andmoderationanalysisisappliedfortheﬁrsttimeinadiscretechoicesetting.Wetestedthehypothesis thattrustinlogomediatestherelationshipbetweenthelogoandconsumerchoicefororganiclabelled foodproducts.Resultsdonotallowrejectingthehypothesisthattrustinlogototallymediatestheeffect ofthelogo.Therefore,thewillingnessfororganicproductscouldbeinterpretedas“costfortrust”:the higherthetrustthehighertheperceivedvalue-for-money.Themediationeffectoftrustinlogodoes notvaryacrosspoints-of-purchaseorregions.Ournovelapproachissusceptibleofvariousapplications whenanalysingchoicedataandcanbeextendedfurther.

1. Introduction

Mediationanalysisisameansoftestinghypotheticalprocesses andmechanismsthroughwhichanindependentvariable,Z,might have an indirect effect over a dependentoutcome variable, Y, throughoneormoremediators,M,sometimescalledintervening orprocessvariables[1–4].

Usuallymediationanalysesare appliedin theframework of simple OLSmultipleregression orother methodsof estimation e.g.logit,multilevelmodelling,andstructuralequationmodelling (SEM)(amongothers:MacKinnon[5],Hayes[6],Hayes[7],Valeri &VanderWele[8]).

Moderationreferstotheeffectsofaqualitativeorquantitative variable“thataffectsthedirectionand/orstrengthoftherelation betweenanindependentorpredictorvariableandadependentor criterionvariable”[2].Itisaverydifferentconceptfrom media-tion.Forexample,genderdifferencesmayexistintheimpactof, say,brandawarenessonactualpurchaseintention.Inthiscase,the variablegenderinteractswiththevariablebrandawarenessin pre-dictingtheoutcomeofpurchaseintention.Wesaythatgenderisa moderatoroftheimpactofbrandawarenessonpurchaseintention.

∗Correspondingauthor.

E-mailaddress:[email protected](R.Zanoli).

Inthispaper,weapplymediationandmoderationanalysisto discretechoicedatatoanalysetheroleoftrustinlogoinmediating willingness-to-pay(WTP)fororganiclabelledproducts,by adapt-ingtheoriginalBaron&Kenny’s[2]approachtodiscretechoice models1_._We_also_investigate_the_moderating_role_of_the point-of-purchaseonthismediation,whileaccountingforregionalvariation. Our resultsshowthat overalltrust intheorganiclogo com-pletelymediatesconsumers’choiceoforganicapplesandeggs.In otherwords,sinceorganiclogosarecuestotrustworthyorganic quality,trustintheselogoscompletelyexplains(causes)consumer choiceandrelatedWTP.Thiscausalityismoderatedbythe point-of-purchase,sinceexposureto(andawarenessof)differentlogos variesindifferenttypesofshops.Thattrustinorganicqualityisa keyfactorinpurchasedecisionsfororganicproductsisnotanew ﬁnding(seee.g.Naspetti&Zanoli[9]).Thenoveltyofouranalysis istodirectlyrelatetrustinlogowithWTP,hencerenderingthe

1_Recently,_mediation_researchers_have_criticized_the_original_seminal_work_of

Baron&Kenny[2]andfocusedmoreontheestimationoftheindirecteffectofMon Y[6].Theseworkscriticizethe“jointsigniﬁcance”approachofBaron&Kennyonthe followinggrounds:a)itssupposedlowpowerindetectingtheeffectofthe media-torvariables,b)thefactthattheindirecteffectisnottesteddirectlybut“inferred logicallybytheoutcomeofasetofhypothesistests”[6].Someofthesecritiques havebeenretracted[12]andarenotveryrelevantinourcase,sinceinthispaper wefocusonthemediationeffect(M→Y)andnotontheindirecteffect(X→M→Y). http://dx.doi.org/10.1016/j.njas.2015.01.001

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perceivedproductpriceasanindicatorof“costfortrust”.Dually, themorethetrustembeddedinaspecific(organic)logo,thehigher theperceivedvalueformoney.Givenperceivedcustomervalueis afunctionofperceivedbenefitsandperceivedsacrifices[10,11], webelievethat ourfindingsarerelevantsinceallowtodirectly relatea higherlevelbenefit(trust)toanattribute (price),being logos(extrinsicattributes)justavisiblecueofhigherquality,which inturnincreasestheperceivedvalue.

Finally,thispaperintroducesawaytoanalysetheinﬂuenceof mediatingandmoderatingvariablesonWTPinasimpleway,using randomparameterestimationor mixedlogitmodel. Coefﬁcient estimatesforattributesthatarefullymediatedbyothervariables should,inprinciple,bezero.Moderationishandledby decompo-singanyheterogeneityobservedwithintherandomparameters.

The rest of the article is organised as follows. Section two describesthechoicedata.Insectionthreeweillustratethemethod ofinvestigationandthedifferenttypesofmodelsusedfor test-ingformediationandmoderationeffects.Sectionfourreportsthe resultsandtheirdiscussion,whilethelastsectionconcludes. 2. Data

WeusepartialdatafromtheJanssen&Hamm’s[13] survey thatanalysed theimpactof differentorganiccertiﬁcation logos onconsumer’sWTP.Thisstudyfocussedon6EU countriesand twoproducts(applesandeggs)andanalysedhowthelogochoice isinﬂuencedbyconsumerawarenessandperceptionofdifferent organiclogosandbyconsumercharacteristicsregardingthebuying behaviourfororganicfood.

ChoiceexperimentswereconductedtoelicittheWTPfor differ-entorganiccertiﬁcationlogos.Insubsequentstructuredinterviews, datawascollectedonfactorsthatmightinﬂuenceconsumers’WTP. 2.1.1. Choiceexperiment

Thedataweusehererefertothechoiceexperimentinapples. Recruitedparticipantsneededtobuyorganicapplesatleastonce permonth. The choice of theproduct obviously inﬂuencesthe WTP,thoughthescopeofourstudywasnottoobservedifferences betweentheWTPinrelationtotheorganiccategory,asinKrystallis andChryssochoidis[14].

Thehypotheticalchoiceexperimentwasdesignedtoresemble arealbuyingsituationandtobeincentive-compatible.Unlikein otherstudieswithchoiceexperiments(e.g.Loureiro&Umberger [15], Lockshin et al.[16], Lusk &Schroeder[17]), we usedreal organicapplesinsteadofpicturesordescriptionsofproducts. Typ-icalproductinformationwasshownonthepricetag,whichwas identicalacrossthe alternatives(variety, domestic origin). Fur-thermore,theparticipantswerepaida cashincentiveandwere instructedthattheywouldhavetopayforthechosenapplesjust likeinarealshoptoreducethehypotheticalbias[17].Fortax rea-sons,attheendofthechoiceexperiment,theparticipantswere informedthattheycouldnotbegiventheapplestheyhadchosen andtheycouldkeepthemoney.

Eachparticipantcompletedtwochoicesetsfororganicapples. Eachchoicesetcontainedfourproducts,whichlookedidentically butweremarkedwithdifferentorganiclogosandprices(Figure1). Fourdifferentorganiclogosweretested:threeorganiclogosplusan alternativewithoutalogo.Inaddition,theparticipantscouldalso choosenottobuyanyoftheofferedalternatives(“no-buyoption”). The no-buy option was included to make the buying decision morerealistic.Furthermore,previousstudiesshowedthatforced choicemightleadtobiasedresults[18].Thelogoswherechosen torepresentthemostfrequentlyavailablelogosinalldistribution channels(supermarketsandspecialisedorganicshops);theywhere

Fig.1. Choiceexperimentsetting.

chosenonthebasisofpreviousfocusgroupsandasurveyinretail shops.Theold voluntaryEUlogowasusedintheexperiments, sincethesurveywasconductedpriortotheintroductionofthe newmandatoryEUlogo.TheotherlogosusedwereCCPB (Certi-ficazioneecontrolloprodottibiologici),themostcommonprivate organiccertificationlogoinItaliansupermarkets,andDEMETER,a worldwideprivateorganiccertificationlogoforbiodynamic prod-ucts.Thelogoawarenesswasspecificallytestedforbya means ofLikert-typescale(1=completelyunknown7=well-known,with awarenessthresholdratingabove4):theEUlogohadanawareness of83.4%,theothertwologoslower(50.5%and46.5%respectively, inthetotalsample).IndeedtheCCPBlogoismainlyfoundinbrands soldinsupermarkets(awareness;51.9%),whiletheDEMETERone inspecialisedshops(awareness:63.8%).Figure2.

Fourdifferentpricelevelsweretested.Onemonthbeforethe experimentswereconducted,theaveragemarketpriceoforganic apples/eggswasdetermined,basedonwhichthetestedpriceswere chosen(Table1).

Anorthogonalfractionalfactorialexperimentaldesignwith16 differentchoicesetswasusedforthesystematicvariationofthe price levels acrossthe organic labels. The sample was divided intoeight blocks.Althoughit wasnotdesigned tominimize d-efﬁciency, the design was evaluated post-hoc using Ngene 1.1 (d-efﬁciency=1.94).

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Table1

PricelevelsforapplesinEuro/kginthechoiceexperiments.

Price IT

level Ancona Bari Milano

-20% 2.33 2.14 2.58

Avg. 2.91 2.68 3.22

+20% 3.49 3.22 3.86

+40% 4.07 3.75 4.51

2.1.2. Structuredinterviews

Thestructuredinterviewsconductedafterthechoice experi-mentscontainedthefollowingquestions:

1.Socio-demographiccharacteristics:gender,age,householdsize, levelofeducationandnethouseholdincome.

2.Consumerperceptionsofthelabels:Theparticipantswereasked to rate each of the three tested labels containing the logos regardingtheirleveloftrustandcredibility.Theanswer cate-goriesareshowninTable2.

Thetwoitemswheresummeduptobuildascale,reﬂecting con-sumer‘overalltrustinlogo’(forsimplicitywewilllabeltheoverall scaleTRUST).Werecodedconsumersashavingacertaindegree ofTRUSTallrespondentswhoexhibitedaratinghigherthan4in eitherofthetwoitems.Therefore,theTRUSTscalemayhavethree values:0(thelogoisconsideredneithertrustworthynorcredible), 1(thelogoisconsideredeithertrustworthyorcredible),2(thelogo wasratedbothtrustworthyandcredible).ThenewTRUSTscaleis highlyreliable(Cronbach’salpha:0.88).

Dataon427respondentswerecollectedface-to-faceinItalyin FebruaryandMarch2010afterapre-testwith15participantsone monthearlier.Thechoiceexperimentswereconductedinthree dif-ferenttowns(MilanintheNorth,AnconaintheCentreandBariin theSouth)attwokindsofshops/locations:conventional supermar-ketsand/orshoppingcentresandspecialisedorganicfoodshops. Halfofthechoiceexperimentswereconductedat eachkindof shop,approximatelyreﬂectingthemarketshareofeach kindof shopinItaly,whereorganicmarketsalesaccountfor1,550Millions EurosandaremainlyconcentratedintheNorthandCentre[19]. InItaly,logosandlabelsnowadaysplayanincreasinglyimportant rolealongsidesmall(oftenspecialised)retailinginachievingmore accountable producer-consumer relations; until recently, small retailersandfarmers’marketshaveoccupiedadominantposition while“supermarketscommandacomparativelysmallfractionof therelativelyhighamountoftrustplacedinfood”[20].Thisisnot onlyacharacteristicoftheorganicfoodmarket:inItalysmalland medium-sizedfarmsarethevastmajorityandthereisa strong presenceofsmallspecializedshops(groceries,bakeries,butcheries, etc.),openmarketsandfarmers’markets,especiallyinthe Cen-treandtheSouth.Thisregional/point-of-saledifferencesobviously affecttheconsumersaswell[21].

Table2

Labelratingsintheinterviews.

Item Interviewquestion Answercategories Trust Pleaserateeachofthe

labelsonthefollowing scale.

Scalefrom1to7with: 1=Icompletelytrustthislabel. 7=Idonottrustthislabelatall Credibility Pleaserateeachofthe

labelsonthefollowing scale.

Scalefrom1to7with: 1=Thislabeldoesnotstandfor realorganicproducts.

7=Thislabelstandsforrealorganic products.

Additionalcategory“Idon’tknow”

Table3

Descriptionofthesample:Socio-demographiccharacteristics.

IT n 427 Gender n 427 Female 70.3% Male 29.7% Age n 427 18-44years 42.4% 45-75years 57.6%

Meanageinyears 46.2

Education

n 427

Noformalqualiﬁcation 0.0% Middleschool(min.8yearsofschool) 1.6% Secondaryschool(min.12yearsofschool) 11.0% Collegeoruniversitydegree 87.4%

Householdsize

n 426

mean 2.8

Householdnetincome

n 426 <600D 4.9% 600Dto<1,200D 14.3% 1,200Dto<1,800D 21.4% 1,800Dto<2,400D 16.7% 2,400Dto<3,000D 13.1% 3,000Dto<3,600D 10.1% 3,600Dto<4,200D 5.4% 4,200Dto<4,800D 4.9% 4,800Dto<5,400D 2.3% 5,400Dormore 6.8%

Thesocio-demographiccharacteristicsofthesampleare pre-sented in Table 3. The level of education was generally high in the sample. However, this result is in accordance with previous studies suggesting that the share of people with a college or university degree is, on average, much higher among consumers of organic food compared to the rest of the population [22–24]. 70% of the respondents were female, reﬂecting the relationship of foodshoppers in Italy, where mainly women are responsible for food purchases. The mean household size was slightly above average compared to the population.

3. Modelspeciﬁcation

InthemediationmodelofBaronandKenny[2]thedirecteffect ofZonYisnotedas“Z→Y”andtheindirecteffectofXonZthrough themediatorMas“Z→M→Y.”

Inourcase,wecanpostulatethatorganiclogosmayenhance consumertrusttowardorganicfood,whichinturnmaypositively impacttheWTPfororganicfoodcarryingthoselogos.

FollowingBecker[25]andHuffmanetal.[26],considerthe fol-lowingutilityfunction:

U=U(Q1,Q2,Q3,&,Qi,&,QI−1,QNL;T1,T2,&,Ti,&,TI−1,TNL)

=U(Q,T) (1)

UtilityisbasedonpreferenceofIchoicevariables:organicfood labelledwithvariousorganiclogos(Q1,Q2,Q3,...,QI-1),andwithno

logo(QNL).Theutilityofeachchoiceishypothesizedtobeaffected

bytheleveloftrustassociatedtoeachoftheselogos(T1,T2,...,TI-1, TNL).

Thepricesoforganicfoodwithlogo(ornologo)arep1,...,pI-1, pNL.

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Atanytime,consumersmaximizetheirutilitysubjecttothe conventionallinearbudgetconstraintX:

MaximizeU(Q,T)s.t.

k

pkQk=X (2)

Assuming strictly non-concave utility, we can form the Lagrangeanequationfor(2),thatis

=U(Q,T)+(X−

k

pkQk) (3)

Theﬁrstorderconditionsare:

∂

U

∂

Qk +

∂

U

∂

Tk =pk

(foreachk=1,2,...,i,NL) (4a)

k

pkQk−X=0 (4b)

Equation(4a)representsthebasisforourmediationanalysis, i.e.theassumptionthatprice–opportunelyscaled–shouldequate thesumofthemarginalutilitiesofchoiceandofthetrustoneach logo.

Undertheassumptionofutility-maximizationbynconsumers facingIalternatives,considertheusualdecompositionofthe over-allutilityofeachalternativei:

Uni=Vni+εni (5)

where εni captures the factors that affect utility that are not

includedinVni.

Inalabelledchoiceexperiment,thelinear-in-parameters rep-resentativeutilityisusuallyspeciﬁedas:

Vni=˛i+xni ˇ (6)

where,˛irepresentsaconstantthatisspeciﬁcforalternativei,xiis

avectorofvariablesthatrelatetoalternativeiasfacedbyconsumer n,andˇarethecoefﬁcientsofthesevariables.

Ifequation(1)holds,andweassumethatthelogosenhance consumertrust,wecanthereforepartitionthevectorxniand

re-writetherepresentativeutilitytotestthemediationeffect:

Vni=˛i+zni+ıTni (6)

where˛irepresentsaconstantthatisspeciﬁcforeachalternative

logoi,Tnithemeasuredlevelsoftrustinthelogoiforeachconsumer n,andznithevectorofremainingattributesofeachalternative.

Givenagainthelinearcausalrelationshipinwhich the vari-ableZis presumedtocausethe variableY(Z→Y),a moderator variable (W)–usually a covariate–is a variable that alters the strengthofthecausalrelationship(Baron&Kenny,1986).When thereismediation,ifWmoderatestheindirecteffectofZonY throughM,thismeansthatmediationoftheeffectof ZonYis moderated,somethingreferredtoasmoderatedmediation. Medi-atedmoderation,instead,referstothephenomenoninwhichthe product of Z and a moderator of Z’s effect (W) on Y carry its effectonYthroughM[7].In mediatedmoderation,the moder-ationdisappearswhenthemediatorisintroduced.Inmoderated mediation, thepattern ofmediationvaries asa function ofthe moderator[4].

3.1. BasicmodelandWTP

Sinceonly differencesin utilitymatters[27],whendifferent logosareinvolvedthebasicmodelin(6)maybespeciﬁedas:

UnEU=ASCnEU+ˇnPRICE+εnEU

UnCCPB=ASCnCCPB+ˇnPRICE+εnCCPB

UnDEM=ASCnDEM+ˇnPRICE+εnDEM

UnNL=ˇnPRICE+εnNL

UnNB=ASCnNB+εnNB

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wherethesubscriptsNLstandsforNologo,andNB“Nobuyoption”, ASCniarethealternativespeciﬁcconstant(theNLisnormalizedto zeroforidentiﬁcation),PRICEisthepriceineurosshowedineach label(whichisobviouslyzerointheNboption).

The random parameter mixed logit model (MXL) for panel observationspopularisedbyTrain[28]obviatesthelimitationsof preferencehomogeneity(allrespondentsaspreferenceclones)and allowsforthemorerealistichypothesisoftastevariationacross respondents.Inamixedlogitmodeltheutilityofindividualifrom alternativejisspeciﬁedas:

Uij=ˇiXij+eij (8)

WhereXijareobservedvariablesthatrelatetoeachalternative

anddecisionmaker,ˇiisavectorofcoefﬁcientsforthesevariables

forindividualirepresentingthatperson’stastes,andeijisarandom

term.

InMXLspeciﬁcationsmarginalWTPforeachattributeofchoice iscalculatedastheratioofcoefﬁcients:

WTP= ˇ(attributelevel)

ˇ(price) (9)

Thiswayofproceedingemploysmodelsspeciﬁedonthe “pref-erencespace”,whereoftenthepricecoefﬁcientisheldconstant. Thisassumptionmakestheestimationeasierbutrequires undesir-ablerestrictionsonthemodel,suchaconstantmarginalutilityof money.

Besidesmodellingtasteheterogeneityinpreferencespace–i.e. byspecifying thedistributionof coefﬁcients intheutility func-tionandthenusingthemtoderivethedistributionofmarginal WTP–wealsoestimatedthemodel usingthegeneralisedmixed logit (GMXL) model by Fiebig et al. [29]. This model extends therandomparameters“mixed”multinomiallogitmodel(MXL) developedbyReveltandTrain[30]andencompassesalltypesof multinomial logitmodels.We speciﬁed themodel allowingfor tasteheterogeneityinallvariablesincludingtheASCs2_._The_GMXL model allows testing for scale heterogeneity, which was how-evernotpresentinourdata(␶=0,␴=1asfromFiebigetal.[29]). TheMXLmodelis,therefore,anadequaterepresentation ofour data.

However,theGMXLmodelcanbesimplyre-parameterizedsuch thattheparametersaretheWTPforeachattributeratherthanthe utilitycoefﬁcientofeach attribute.Thatis,insteadof theusual approachofparameterizingthemodelin‘preferencespace’(i.e., coefﬁcientsintheutility),themodelisparameterizein‘WTPspace’ [31,32].

Sinceeachrespondentwaspresentedtwochoicesforeach prod-uct,themodelwasestimatedaspaneldata.

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Table4

ResultsoftheMXL&WTP-spacemodelsfororganicapplechoice(mediationanalysis).

Unmediated Mediated

MXL WTP-sp MXL WTP-sp

ASCEUlogo RP ␮ 2.03 8.81 2.30 7.59 -0.02 0.06 0.21 0.62 ␴ 2.33 6.20 1.79 4.28 1.89 5.77 1.56 5.55 ASCCCPB RP ␮ 1.17 5.40 1.29 4.36 -0.26 0.77 0.00 0.02 ␴ 1.51 4.31 1.58 3.58 0.77 1.27 0.19 0.22 ASCDemeter RP ␮ 1.10 4.00 0.99 2.59 0.42 1.53 0.61 1.75 ␴ 2.48 6.05 3.02 5.57 1.55 3.86 1.74 4.56 Price RP ␮ -0.89 6.77 (-1.15) (5.82) -0.94 6.56 (-1.39) (2.24) ␴ 1.13 4.59 (0.50) (2.14) 1.27 5.10 (0.58) (1.60) ASCNo-buy NR ␮ -9.84 6.11 7.13 5.43 -11.68 5.95 11.10 1.55 TRUST RP ␮ – – 1.75 8.15 1.87 7.43 ␴ – – 1.25 5.51 1.43 6.95 Nr.parameters 9 9 10 10

FinalLogLikelihood -981.45 -986.06 -892.91 -898.38

Adj.PseudoR2 _0.29 _0.28 _0.35 _0.35

AIC 1980.9 1992.1 1807.8 1820.8

Nr.observations 854 854 854 854427

Nr.individuals 427 427 427

–Termwasnotestimatedinthemodel.Thetermsinbracketsarethecoefﬁcientsandstd.deviationsofpriceinpreferencespaceform. Sinceeachrespondentperformedtwochoices,thenumberofobservationsistwicethenumberofrespondents.

a_‘RP’_stands_for_random_parameters,_‘NR’_stands_for_non-random_(ﬁxed)_parameters.

3.2. InferenceonMediation

InordertotestthattheTRUSTvariablehasmediatingeffectson thechoice,werefertoBaronandKenny[2]stepwiseprocedure:

Step1:Showthatlogosaffectthechoice.Thisstepestablishes thatthereisaneffectthatmaybemediated.Thismaybeestablished byestimatingthemodelspeciﬁedin(7).

Step2:Showthatthecausalvariables(thelogosandtheprice) arecorrelatedwiththemediatorTRUST.Thisstepisusually per-formedbyregressingthemediatorovertheindependentvariables, X.Inourdiscretechoicecontext,thistestwasperformedby substi-tutingactualchoicewithTRUSTintheequations(7)3_(Train_[33]_, p.6)4_.

TRUSTEU=ASCEU+ˇPRICEPRICE+εEU

TRUSTCCPB=ˇPRICEPRICE+εCCPB

TRUSTDEM=ASCDEM+ˇPRICEPRICE+εDEM

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Notethat,sinceTRUSTisonlyratedforthethreelogos,neither theNLnortheNButilitieswereestimated.Therefore,oneoftheASC couldnotbeidentiﬁedandwedroppedASCCCPBfromtherespective

equation.

Step3:Showthatthemediatoraffectsthechoice,while con-trollingfortheeffectsofthelogos.Totestthis,weneedtoestimate theaugmentedmodel(6),whichmaybespeciﬁedas:

UEU=ASCEU+ˇPRICEPRICE+ıTRUSTTRUST+εEU

UCCPB=ASCCCPB+ˇPRICEPRICE+ıTRUSTTRUST+εCCPB

UDEM=ASCDEM+ˇPRICEPRICE+ıTRUSTTRUST+εDEM

UNL=ˇPRICEPRICE+εNL

UNB=ASCNB+εNB

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Again,notethat,sinceTRUSTisonlyratedforthethreelogos, thevariabledoesappearinneithertheNLnortheNButilities.

3_For_simplicity,_in_this_and_the_following_equations_we_have_removed_the

sub-scriptn

4_TRUST_being_a_count_variable_is_modelled_as_frequency_data.

Step4:Toestablishthat‘overalltrustonlogo’completely medi-ates the logo-choice relationship, the effect of logos on choice controllingforTRUSTshouldbezero.Inotherwords,ifcomplete mediationtakesplace,theASCcoefﬁcientsshouldbezero,whileif partialmediationtakesplace,thecoefﬁcientsoftheASCshouldbe reducedcomparedtotheonesestimatedinStep2.

3.3. Moderationanalysis

Totestthehypothesisthatthemediationeffectsarenot moder-atedbyothermeasuredcovariates,wehaveinteractedthepotential moderatorvariables(covariates)withtherandomparameters(ASC coefﬁcients,PRICE,andTRUST).Doingthisineffectdecomposes anyheterogeneityobservedwithintherandomparameter, offer-inganexplanationastowhythatheterogeneitymayexist[34]. Besides,weconductedthesameanalysisintheunmediatedcase too,tocheckforsimplemoderatingeffectsofthesecovariatesover choice.Ifmoderationexistsintheunmediatedmodelandthen dis-appearinthemediatedone,wecanspeakofmediatedmoderation. Instead,weareobservingamoderatedmediationmodelif media-tionismoderatedbycovariates,i.e.mediationisstrongerforone group(e.g.males)thanforanother(e.g.females).

Table5

ResultsoftheMXLmodelforTRUST.

MXL

Parameters RPa _Coefﬁcient _Estimate _|z-values|

ASCEUlogo NR ␮ 0.32 40.97

ASCDemeter RP ␮ -0.91 69.20

␴ 1.37 84.19

Price NR ␮ 0.01 1.41

Nr.parameters 4

FinalLogLikelihood -3422.77

Adj.PseudoR2 _0.06

AIC 6853.5

Nr.observations 838

Nr.individuals 427

Sinceeachrespondentperformedtwochoices,thenumberofobservationsistwice thenumberofrespondentslessmissingobservations.

a_‘RP’_stands_for_random_parameters,_‘NR’_stands_for_non-random_(ﬁxed)

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Table6

ResultsoftheMXLmodelsfororganicapplechoice(moderationanalysis).

Unmediated Mediated

Parameters RPa _Coefﬁcient _Estimate _|z-values| _Estimate _|z-values|

ASCEUlogo RP ␮ 2.19 3.61 0.38 0.89 ␴ 2.21 6.12 1.85 5.66 ASCCCPB RP ␮ .17 0.30 -0.08 -0.2 ␴ 1.59 4.08 0.50 0.68 ASCDemeter RP ␮ 1.41 2.20 0.78 1.95 ␴ 2.37 6.19 1.40 3.84 Price RP ␮ -1.02 3.18 -0.93 6.67 ␴ 1.09 4.44 1.22 5.08 ASCNo-buy NR ␮ -9.76 6.10 -10.40 6.45 TRUST RP ␮ – – 1.67 6.31 ␴ – – 1.27 5.43 SHOPXASCEU HM ␮ -0.34 0.82 -0.54 0.96 SHOPXASCCCPB HM ␮ 0.47 1.44 -0.02 0.04

SHOPXASCDemeter HM ␮ -1.39 2.95 -0.46 0.95

TOWNXASCEU HM ␮ 0.02 0.09 – –

TOWNXASCCCPB HM ␮ 0.36 1.44 – –

TOWNXASCDemeter HM ␮ 0.20 0.70 – –

SHOPXPrice HM ␮ 0.05 0.24 – –

TOWNXPrice HM ␮ 0.04 0.32 – –

SHOPXTRUST HM ␮ – – 0.03 0.12

Nr.parameters 17 15

FinalLogLikelihood -970.32 -892.76

Adj.PseudoR2 _0.29 _0.35

AIC 1974.6 1815.5

Nr.observations 854 854

Nr.individuals 427 427

–Termwasnotestimatedinthemodel.

Sinceeachrespondentperformedtwochoices,thenumberofobservationsistwicethenumberofrespondents.

a_‘RP’_stands_for_random_parameters,_‘NR’_stands_for_non-random_(ﬁxed)_parameters,_‘HM’_stands_for_{heterogeneity}_in_mean_parameter.

4. Results

4.1. TestingforMediation

Table4reportsMXL(preference-space)andGMXL(WTP-space) modelestimationresultsforapples,bothestimatedusing200 Hal-tondraws.Allmodelsallowforaconstantfixedeffectfortheno-buy alternative,whileallrandomparametersareassumedtobe nor-mal.TheWTPspacemodelparametersarealreadyWTPestimates. InthefirsttwocolumnsfromtheleftinTable4theunmediated modelresultsspecifiedby(7)arereported.TheserefertoBaron andKenny’s[2]Step1.Intheremainingtwocolumnsontheright theresultsofBaronandKenny’sSteps3and4arereported,as specifiedin(7).

AllASCparametersreportedinTable4forbothMXL(preference space)andWTP-spaceunmediatedmodelsarehighlysignificant, showingtheroleoflogosinexplainingconsumerpreferencesof organicapples.Allstandarddeviationparametersarealsohighly significant,whichisconsistentwiththehypothesisoftaste hetero-geneity.TheWTP-spaceestimatesaresubstantiallysimilartothose thatmaybecalculatedbytheunconditionalparameterestimatein theMXLspecificationbytakingtheratioofeachASCparameter estimateandtheabsolutevalueofthepriceparameterestimate5_. TheyrepresenttheadditionalWTPwithrespecttothe‘NoLogo’ label(referencealternative).Asfoundinpreviousstudies[13,35], theEUlogowashighlyregardedbyItalianconsumersasameansto guaranteeorganicfoodproducts.Theotherlogosarelesserknown, andingeneralscorealoweradditionalWTP.

InTable5wereporttheMXLresultsofregressingTRUSTover logosASCandprice(BaronandKenny’sStep2),estimatedusing200 Haltondraws.Allrandomparametersareassumedtobenormal. SinceestimatedstandarddeviationsofEUASCandpricewerefound

5 _These,_for_the_unmediated_MXL_model_are:_EU_2.27_D_,_CCPB_1.30_D_,_Demeter_1.23_D_.

tobeinsignificantinrestrictiontests,theywererestrictedtozero, implyingfixedcoefficientsandanabsenceofheterogeneity.Not allrespondentsratedthelogosfortrustworthinessandcredibility, resultingin14missingobservations.

TheresultsreportedinTable5showthatindeedtheoverall TRUSTinthelogoissignificantlycorrelatedwiththelogoitself.The EUlogoistheonethatexhibitshighertrust,withnoapparent het-erogeneityamongItalianrespondents,whiletheDemeterlogo–on average–isnegativelycorrelatedwithtrust(itiswell-knownonly byaminorityofrespondents:seeJanssenandHamm[13]).Overall modelfitislow,sincethisisnotafullyspecifiedmodelofTRUSTand isonlyusedtoestablishtherelationshipbetweenTRUSTandthe explanatoryvariables(logoASCsandprice)inthelabelledchoice model.

Theseresultsarefurtherconfirmedbytheresultsofthe medi-ationanalysisreportedinthelasttwocolumnsofTable4.Once thevariableTRUSTisaccountedforinthemodels,theASC param-eter estimates become non-significant (i.e. zero)6_, _both _in _the preference-spaceandtheWTP-spacemodels.Notablythestandard deviationsof parametersremain significant(with theexclusion of theCCPB ASC in thepreference space model),showing that consumersexhibittasteheterogeneityandtheparametersare dis-tributednormallyaroundzero.

Themodeldoesnotrejectthehypothesisofcompletemediation ofthelogoeffectsonchoicethroughtheTRUSTvariable.Thiseffect

6_Kenny,_in_his_mediation_website_[4],_warns_that_the_{coefﬁcients}_should_be_zero_in

value,andnotsimplystatisticallynon-significant,astheywereinBaronandKenny [2],“becausetriviallysmallcoefficientscanbestatisticallysignificantwithlarge samplesizesandverylargecoefficientscanbenon-significantwithsmallsample sizes”.However,inourchoicemodeltheTRUSTvariablemaysufferofendogeneity andthiswouldresultininconsistent(butnotinefficient)estimatesofbandc’: sincethesamplesizeislarge,andwehaveestimatesofboththeparameters(which arenonsignificant)andofthestandarddeviationsoftheparameterdistributions (whichinsteadarehighlysignificant),wecanbefairlyconfidentinourconclusions regardingcompletemediation.

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issharedbyalllogos,thoughitisclearthatthehighesteffectis ontheEUlogo,whichexhibitedthehighestWTP.Inotherwords, itappearsfromTable4thatconsumers’trustinlogoiscompletely entangledwiththelogoitself.Indeedtheorganiclogoisanextrinsic cueforthe(organic)qualityoftheproduct(inourcase,applesor eggs).

4.2. TestingforModeration

Wehavetestedthemoderationeffectoftwocovariates:SHOP& TOWN.Theﬁrstisadichotomousvariable(0=specialisedorganic shop,1=conventionalsupermarket.Thelatterisacategorical vari-able referring to where interviews where collected (Northern, Central,andSouthernItaliantowns).

SinceTOWNwasnotsigniﬁcantasmoderatorintheunmediated model,wehaverunthemediatedmoderationanalysisonlywith thevariableSHOPasmoderator.Table6reporttheresultsofour estimationsinpreferencespace.

Intheunmediatedmodel,SHOPappearstobeasigniﬁcant mod-eratorfortheDemeterlogo.Indeed,aswehavealreadymentioned, thislogoismorefrequentlyseeninspecialisedorganicshop(and consumersbuyinginthoseshopsaremoreawareofit).The nega-tivesignintheinteractiontermmeansthatthemarginalutilityof Demeterlogoishigherforthosebuyinginthespecialisedshop.

However,oncelogos aremediatedby TRUST,SHOPstopsto explainpreferenceheterogeneityinDemeterlogoASCs:the mod-erationeffectofSHOPismediated,too.Inotherwords,trustin logoexplains(causes)thechoices(andrelativeWTPs), notwith-standingthekindofpoint-of-purchasethelogoarefound.Wecan concludethatthemediationeffectoftrustinlogodoesnotvary acrosspoints-of-purchaseorregions.

5. DiscussionandConclusions

Inthispaper,wehaveshownhowmediationandmoderation analysiscanbesimplyintegratedinadiscretechoicesetting.By ournovelapproach,onecantesttheroleofmediatingand mod-eratingvariables onconsumerchoiceandrelated WTP,using a generalframeworktomodelpreferenceheterogeneity,i.e.without imposingunrealisticconstraintsonthemodel.

Specifically,ourstudytestedthehypothesisthattrustinthe (organic)logomediatestherelationshipbetweenthelogoand con-sumerchoice(andrelatedWTP)fororganiclabelledfoodproducts. Ourfindingsconfirmthefactthattrustinlogoplaysamajorrolein consumers’choiceoforganicapples(andeggs),andthatthereason laysinthatthelogosareperceivedascuestotrustworthyorganic quality[35,36].Trustisa multidimensionalconcept [37],which facilitatesandpositivelyinfluencesconsumerspurchaseintentions andchoices[38].Inthecaseoffood,itisanessentialelementfor decision-makingandisdirectlyrelatedwithfoodsafety percep-tions[39,40].Consumersperceiveorganiclogosasanimportant sourceoftrust[41,42],whileZanoli&Naspetti[43]haveshown thattrustin logoisdirectlyassociatedwithconsumers motiva-tionstopurchaseorganicfood.Usingourapproach,sincetrustin logototallymediatestheeffectofthelogo,WTPfororganic prod-uctscouldbeinterpreted–given(9)–as“costfortrust”,sincetrust totallymediates thelogos (ASCs).Inotherwords,trust embed-dedinthelogosfullyexplains(“causes”,inmediationsense)WTP, andthehigherthetrustthehighertheperceivedvalue-for-money. Therefore,consumers’perceivedacceptablepriceorinternal refer-enceprice[44]isdependentontrustinlogo;althoughthisprice mayvaryacrosspoints-of-purchaseand/orregions,themediation effectoftrustinorganiclogo–aswehaveproven–doesnot.

We believethat theﬁndings of ourstudyhave implications thatgobeyondourlimitedexperimentonorganiclogos.Usingour

approachonecaneasilytesttheeffectofbrandimage(asembedded inlogosbutalsoinbrandnames)onchoiceandWTP,byusingtrust asmediator.Buttheapproachissusceptibleoffurtherextensions, wheninvestigatingtheimpactofmediating/moderatingvariables onWTP.

The advantage to use our approach is that choice experi-mentsallowarigorous–albeitveryrealistic–investigationofhow consumerchoicesaremade(rectiusstated)givenhypothetical situ-ations.Forexample,Laranetal.[45]testedthediverseprimingrole ofbrandsandslogansonWTP.Theirstudywasperformedusing asimpleANOVAapproachtoanalysetheeffectofthepersuasive intentofdifferentstimuli (slogans,sentences,brandnamesand logos)onWTP7_._The_stimuli_and_the_WTP_where_measured_in sepa-rate,subsequentexperiments.TheWTP–giveneachstimulus–was measuredinawaynotconsistentwithutilitymaximization.Ina discretechoicesetting,theirmediationandmoderationanalyses wouldhavebeneﬁttedofarigorousrepresentationofutilitybased onasetofattributes(thedifferentstimuli)andtheirlevels(the persuasiveintent),whileallowingadirectmeasureofWTP.

Furtherextensionsofourmodelmayconsidertheuseof “struc-turalchoicemodelling”[46],anapproachthatintegrates choice modelsandstructuralequationmodels,andallowscombiningdata fromseparatebutrelatedchoiceexperiments.

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