The Willingness to Pay of European Consumers for Jointly Produced Israeli – Palestinian Products

Ethical aspects of food products have become increasingly important for Western European consumers. One example of such ethical consumption attributes are “peace products”, commodities produced in peaceful economic cooperation between members of conflicting parties in areas of political conflict. In the context of the Israeli-Palestinian conflict, we investigate the willingness to pay of consumers from four European countries for two food products which are jointly produced by Israelis and Palestinians. We conduct a cross country web survey including a choice experiment addressed to the four European countries. Preference heterogeneity with regard to the willingness to pay for peace building products is taken into account by including survey questions on lifestyle factors, attitudes towards Israel, Palestine and the Israel-Palestinian conflict, personal and social norms as well as socio-demographics. Using random parameter logit models we find that consumers in Great Britain and Germany are willing to pay a premium first off all for European products compared with products from Israel or the Palestinian Territories alone. The willingness to pay for Israeli/Palestinian peace products is lower compared to the surplus for European products. But the cooperation product is favored instead of a single county product, just from Israel or the Palestinian Territories. Hence, cooperation in the form of joint production of peace products would generate benefits