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Malaysian Consumers' Preference and Willingness to Pay for Environmentally Certified Wooden Household Furniture

Shukri, M. and Awang Noor, A. G.

Pertanika Journal of Tropical Agricultural Science, Volume 35, Issue 3, August 2012

Keywords: Contingent valuation, consumer, preference, willingness to pay, certified timber products

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Demand for certified timber products (CTPs) is on the rise, with major markets currently in North America and Europe, where consumers are willing to pay price premiums for these wood products. It is reported that there is little or no local demand for CTPs in the developing producer countries as consumers are said to have little interest in the products and cannot afford to be environmentally ethical in their consumption. A survey was conducted in Kuala Lumpur to determine whether consumers in Malaysia, which is a tropical CTPs producing and exporting country, have a preference and willing to pay price premiums for environmentally certified wooden household furniture (ECWHF). The willingness to pay (WTP) was estimated with the contingent valuation method using the Turnbull lower-bound estimator. The results indicated that a majority (74%) of the respondents showed a preference for ECWHF when priced at similar bid level with its identical non-certified products. However, a much lower percentage of these respondents were found to be willing to pay a price premium for the products. Of the 994 respondents surveyed, only 40.7% indicated a positive WTP. On average, the respondents were willing to pay about 18% more for ECWHF over its identical non-certified competitor. CTPs may be appropriate for specific niche markets which should be identified by marketers of these wood products.

ISSN 1511-3701

e-ISSN 2231-8542

Article ID

JTAS-0355-2011

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