Beyond the Label: Income-Based Heterogeneity in Consumer Valuation of Geographical Indication (GI) Coffee in Indonesia

HRMARS - Purpose: This study investigates how Indonesian consumers value geographical indication (GI) labels on coffee products and examines whether preferences and willingness to pay differ across income groups. It addresses a key research gap concerning consumer-side valuation of GI certification in emerging markets, where trust mechanisms are shaped by both institutional and relational factors. Design/methodology/approach: A discrete choice experiment (DCE) was conducted with 435 active coffee consumers between August and September 2024. Four attributes—GI label, coffee variety, product form, and price—were systematically varied using an orthogonal random design. Data were analyzed using a conditional logit model (clogit) estimated through the survival package in R, with separate estimations for overall and income-segmented samples. Findings: The results show that both formal (official GI logo) and informal (seller claim) labels significantly increase consumer utility, with the official GI logo producing the strongest effect. Middle-income consumers exhibit the highest willingness to pay for GI-certified coffee, indicating that certification credibility resonates most strongly within this aspirational market segment. Price sensitivity remains highest among low-income consumers, while high-income consumers rely more on experiential and brand-based cues. Research limitations/implications: The study focuses on stated preferences in a hypothetical context, which may differ from revealed behavior. Future research could integrate sensory evaluation and real-purchase experiments to enhance external validity. Practical implications: Findings provide actionable guidance for agribusiness stakeholders, suggesting that GI promotion strategies should emphasize consumer education, affordable product segmentation, and integration of digital traceability to strengthen domestic market adoption. Originality/value: This research is the first to empirically quantify income-based heterogeneity in consumer valuation of GI-labeled coffee in Indonesia. It extends theoretical understanding of trust mechanisms in hybrid markets and informs both GI policy and agribusiness marketing strategies in emerging economies.