Natural Resources Section

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1 Proc. Fla. State Hort. Soc. 126:xxx xxx Natural Resources Section Comparing the Effects of Environmental and Economic Beneits Related Information on Consumers Preferences and Demand for Ornamental Plants HAYK KHACHATRYAN* Food and Resource Economics Department, Mid-Florida Research and Education Center, University of Florida, 2725 S. Binion Road, Apopka, FL ADDITIONAL INDEX WORDS. purchase decisions, plant beneits, information effects The effects of plant beneits information on consumer preferences and demand is investigated using data from an Internet survey conducted in the U.S. (N=1151). A number of recent research efforts identiied consumer proiles based on socio-demographic measures such as income, education, gender, race, and preferences for product-speciic characteristics and attributes such as new colors, scents, and vase life guarantees, to name a few. Further, research literature supports claims that being around plants contributes to concentration, boosts creativity, and accelerates the healing process. Other beneits that were discussed in recent studies include household energy savings through reduced solar radiation effects and potential increase in property values. However, the effects of environmental and economic beneits related information, on consumer preferences and demand for ornamental plants remains less investigated. The present study addresses this research gap by investigating the inluence of environmental and economic beneits related information on consumer willingness to purchase more plants. The results showed that environmental beneits related information (relative to economic beneits) has a higher impact on purchase intentions and may offer a greater potential to increase consumers likelihood of purchasing more plants in the future. The U.S. environmental horticultural industry is less aggressive in promoting the beneits that products can provide to human life compared with traditional agricultural industries. For example, the food industry is active in promoting the nutritional beneits of their products through various marketing channels such as labels and advertisements. Many studies found that the effectiveness of those strategies were signiicant (Kiesel and Villas-Boas, 2010; Vande Kamp and Kaiser, 1999). However, retail plant operations are less active in utilizing the information of beneits their products can provide to the end users. For instance, research literature shows that being around plants helps improve concentration, boosts creativity and accelerates the healing process, and plants around a building help save energy by reducing the sun s radiation effect on the walls (Hall and Dickson, 2011). Previous research has extensively focused on investigating preferences for ornamental plant attributes such as colors and scents, preferences for store types, determinants of store choice, and consumers demographic proile clusters ( Irani et al., 2011; Yue and Behe, 2008). Findings on consumption patterns, such as seasonal and occasional purchase, repeat buying habits, and purchase frequency, have also beneited the industry by providing useful insights on effective marketing and inventory management strategies. However, the effects of providing plant beneits information received relatively less attention. The present study addresses this research gap by investigating the inluence of environmental and economic beneits and related information on consumers willingness to purchase more plants. The effects on consumer preferences are compared between environmental *Corresponding author; phone: (407) ; hayk@ul.edu and economic beneits and related information, as well as among groups with different demographic characteristics. Additionally, the inluence of temporal considerations in decision making on individuals willingness to purchase ornamental plants was investigated. Methods Internet survey A nationwide Internet survey was conducted in the spring of 2012 through Qualtrics and Global Market Insite (Internet survey service companies). The online questionnaire was designed based on the recommendations of Dillman et al. (2009). The survey questionnaire was distributed to 2,198 randomly selected panelists, of which 1,982 agreed (i.e., signed consent form) to participate in the plant purchasing preferences survey. Among the participants who agreed to participate, 350 did not meet the survey condition that they were willing to purchase new plants over the next 12 months, and were not included in the sample. Further, 481 responses with the majority of questions left unanswered were considered incomplete and were excluded from further analysis, reducing the sample size to 1,151. Descriptive statistics of the sample are summarized in Table 1. Information treatment One of the sections in the questionnaire provided information about the environmental and economic beneits of plants. After reading the plant beneits information on a computer screen, the respondents were asked 1) whether the information was useful for understanding the beneits of ornamental plants, and 2) whether the information was effective enough to inluence their preferences or future plant purchases. 1

2 Table 1. Summary of the Internet survey data descriptive statistics. Variable Mean Standard deviation Variable Mean Standard deviation Gender Education Male=1 1=Less than high school Female=2 2=High school Age =Some college Minimum=18 4-Two years college Maximum=87 5=Four years college Annual Income =Master s degree 1=Below $20,000 7=Doctoral degree 2=$20,000 $39,000 8=Professional degree 3=$40,000 $59,000 Marital Status =$60,000 $79,000 1=Married 5=$80,000 $99,000 2=Single 6=$100,000 $119,000 Race =$120,000 $139,000 1=African American 8=$140,000 and more 2=Asian American Ownership of Residence =Caucasian 1=Owns 4=Hispanic 2=Rents 5=Paciic Islander 3=Other 6=Other Residence Type Regional Distribution =Condo/Apartment 1=Northeast 2=Townhouse 2=Midwest 3=Single house 3=South 4=Duplex 4=West 5=Other The environmental beneits related cues included the following information: SURVEY SLIDE SUBTITLE: Environmental beneits: clean air, saved energy, reduced noise/pollution It is well known that ornamental plants are crucial to the sequestration of carbon dioxide, thus reducing carbon footprint. By installing natural landscaping, noise pollution levels can be signiicantly reduced, leading to improved quality of life. Research has found that urban green spaces could contribute to reducing the amount of noise by absorbing sound waves. Plants around buildings may signiicantly reduce the sun s radiation effect on the exterior walls during summer and may serve as windbreaks during winter. As such, plants may lower the (excessive) use of energy for heating and cooling buildings. The economic beneits related cues were provided with the following information: SURVEY SLIDE SUBTITLE: Economic beneits: enhanced real estate value, enhanced store appeal Plants may increase real property values. According to marketing studies, landscaping yields, on average, a 109% return on every dollar spent, while other types of home improvements yield less than 100%. Research results showed empirical evidence that the beautiication of stores can improve business proits by drawing more customers, reducing shopper stress, and enhancing overall store appeal. Measures for temporal concerns in decision making After responding to the follow-up purchase likelihood related questions listed after information treatments, the respondents were asked to ill out the Consideration of Future Consequences (CFC) scale, which consisted of 14 questions and was designed to measure the extent to which individuals consider (or assign importance to) the immediate and future consequences of their current behavior (Joireman et al., 2001, 2006, 2012; Strathman et al., 1994). The unidimensional CFC scale (CFC Total) was derived by averaging the 14 questions in the scale. Finally, the respondents completed demographic questions in the last section of the survey. Results and Discussion Figure 1 summarizes respondents rankings of environmental and economic beneits related information. More than half of the survey participants perceived environmental incentives as very useful (22.6%) and useful (31.4%). While economic beneits related information was found to be useful for about 46% of the participants, environmental incentives were found to be considerably more useful (54%) in helping respondents understand the beneits that plants can bring to everyday life. The usefulness of environmental and economic beneits, however, does not easily translate into likelihood of increasing plant purchases in the future. As shown in Figure 2, a relatively smaller portion of respondents indicated that they would increase their plant purchases (i.e., 16.4% very likely and 19% likely for environmental beneits related information; 13.3% very likely and 16.3% likely for economic beneits related information). Consistent with the pattern in Figure 1, the likelihood of increasing plant purchases based on environmental beneits information was higher 2

3 Fig. 1. Consumer responses about the usefulness of environmental and economic beneits information. compared with that of the economic beneits information (Fig. 2). Furthermore, the rankings on the usefulness of economic and environmental beneits information were separated by income and education levels. Environmental beneits related information was found to be more useful across all of the income groups, compared to the rankings for economic beneits information (Fig. 3). Higher income levels were associated with lower likelihood to increase plant purchases, with the exception of the $80k $139k income group ratings based on economic beneits information. Consistent with the relationship between ratings on the usefulness of beneits information by the above income groups, Figure 4 shows a negative association between the education level and usefulness/likelihood of increasing purchases ratings. The likelihood of increasing plant purchases was found to be higher based on environmental beneits information than on economic beneits. Correlations between usefulness of information, likelihood of increasing plant purchases, and temporal considerations (measured by CFC scales) are presented in Table 2. The CFC Total unidimensional scale was separated using seven respective questions to express immediate and future temporal orientations, CFC Immediate and CFC Future, respectively. The CFC Total score was positively correlated with usefulness (r = 0.20; P < 0.01) and likelihood of purchases (r = 0.14; P < 0.01) based on environmental beneits information, as well as with usefulness (r = 0.14; P < 0.01) and, to a lesser degree, with likelihood of purchases (r = 0.07; P < 0.05) based on economic beneits information. However, the correlation can be due to future, immediate, or a combination of the two orientations of the CFC scale, which is discussed below. As shown in Table 2, CFC Future scores are highly correlated with usefulness and likelihood ratings across both environmental (r = 0.33; P < 0.01 for usefulness, r = 0.35; P < 0.01 for likelihood) and economic (r = 0.29; P < 0.01 for usefulness, r = 0.32; P < 0.01 for likelihood) incentives. In contrast, the correlation between respondents CFC Immediate scores and usefulness ratings were not signiicant. The likelihood of increasing plant purchases was positively correlated with CFC Immediate scores with r = 0.06; P < 0.05 for environmental beneits, and r = 0.12; P < 0.01 for economic beneits information. The results reveal that the majority of the correlations between CFC Total scores and usefulness/likelihood of purchase ratings are due to the future orientation of the CFC construct, meaning that individuals who assign higher importance to future consequences of their choices (as opposed to immediate consequences) tend to value the environmental and economic beneits related information more than those who are interested in immediate payoffs from their day-to-day choices. 3

4 Fig. 2. Consumer responses about the likelihood of purchasing more plants after learning about environmental and economic beneits provided by plants. Fig. 3. The effects of environmental and economic beneits information by respondents income level. 4

5 Table 2. Correlations between stated usefulness of environmental and economic beneits information, likelihood of purchase, and consideration of future consequence (CFC) scale. Environmental beneits Economic beneits CFC Usefulness Likelihood Usefulness Likelihood Immediate Future Total of information of purchase of information of purchase CFC Immediate 1 CFC Future 0.22 a z 1 CFC Total 0.86 a 0.68 a 1 Environmental beneits: Usefulness of information a 0.20 a 1 Likelihood of purchase 0.06 a 0.35 a 0.14 a 0.70 a 1 Economic beneits: Usefulness of information a 0.14 a 0.58 a 0.48 a 1 Likelihood of purchase 0.12 a 0.32 a 0.07 a 0.48 a 0.72 a 0.66 a 1 zcorrelation coeficients at P < Fig. 4. The effects of environmental and economic beneits information by respondents education level. Literature Cited Dillman, D., J. Smyth, and L. Christian Internet, mail, and mixedmode surveys: The tailored design method. Wiley, New York. Irani, T.A., D. Clark, B. Raulerson, and D. Slough Not your grandmother s lowers: What combination of lower fragrance and color is preferred by young adult consumers? Spec. Res. Rpt. No. 709, Amer. Floral Endowment, Alexandria, VA. Hall, C. and W. Dickson Economic, environmental and health/wellbeing beneits associated with green industry products and services:a review. J. Environ. Hort. 29(2): Joireman, J.A., T.P. Lasane, J. Bennett, D. Richards, and S. Solaimani Integrating social value orientation and the consideration of future consequences within the extended norm activation model of proenvironmental behaviour. Brit. J. Social Psychology 40(1): Joireman, J., A. Strathman, and D. Balliet Considering future consequences: An integrative model, p In: Judgments over time: The interplay of thoughts, feelings, and behaviors. Oxford University Press, Oxford, UK. Joireman, J., M.J. Shaffer, D. Balliet, and A. Strathman Promotion orientation explains why future-oriented people exercise and eat healthy. Personality and Social Psychology Bul. 38(10): Kiesel, K. and S. Villas-Boas Can information costs affect consumer choice? Nutritional labels in a supermarket experiment. Intl. J. Ind. Org. 31: Strathman, A., F. Gleicher, D.S. Boninger, and C.S. Edwards The consideration of future consequences: Weighing immediate and distant outcomes of behavior. J. Personality and Social Psychology 66: Vande Kamp, P.R. and H.M. Kaiser Irreversibility in advertisingdemand response functions: An application to milk. Amer. J. Agr. Econ. 81: Yue, C. and B.K. Behe Estimating U.S. consumer s choice of loral retail outlets. HortScience 43: