The Effect of Lifestyle on Willingness to Pay: Empirical Study of Organic Rice in Malang, Indonesia

Abstract

This study aims to analyze the relationship of lifestyle and general sustainability values to the level of Willingness To Pay for organic rice. This study used the Generalized Structured Component Analysis (GeSCA) method developed by Heungsun Hwang, Hec Montreal & Takane in 2004. The aim is to replace factors with linear combinations of indicators (manifest variables) in SEM analysis. This analysis approach uses the least square method in the parameter estimation process [1]. GeSCA is a new method of component-based SEM, very important and can be used for score calculation (not scale) and can also be applied to very small samples. The findings of the study based on the values of sustainability obtained altruistic values did not significantly influence on the value of the bio-sphere, biosphere values significantly influence on willingness to pay (WTP) and lifestyle significantly influence on altruistic values, and Willingness to Pay (WTP) for organic rice. This study is original because it focuses on certain regional areas in East Java Province, Indonesia. It concentrates on the problem of influences of lifestyle and the general sustainable value on consumer willingness to pay for organic rice so that it can provide marketers with information on how much they will pay more for organic rice. Therefore, this provides specific information that is important for journal readers.