Identifying the Determinants of Mashhad Citizens' Willingness to Pay for Herbal Teas

The purpose of this study was identifying the factors affecting Mashhad Citizens’ willingness to pay for herbal teas. Data was gathered through a survey method and completing 368 questionnaires by simple random sampling among citizens of Mashhad in spring and summer of 2017. In order to identify the factors affecting consumers' willingness to pay, the Contingent Valuation Method and Ordered Logit Model were used. Data analysis showed that 50 percent of consumers were willing to purchase 5 to 25 percent additional cost for buying these products. The results of estimated model showed that household income, awareness about health benefits, packaging, lack of essence, supply type, existence of information labels, gender female and consumers’ education level, have positive and significant effects, and age, family size, quality, processing and price of herbal teas have had negative and significant effects on willingness to pay for herbal teas. About 23 percent of the respondents have known the lack of knowledge about the uses of herbal teas and 21 percent of them have known the lack of knowledge about the health benefits of herbal teas as the most important problems for the consumption of herbal teas. According to the results, considering appropriate supply and packaging with information label, and publication brochures to inform consumers about health benefits and uses of herbal teas, can increase willingness to pay and more correct consumption of herbal teas.