Consumer preferences and willingness to pay for character-marked cabinets from Alaska birch

A frequent concern among birch lumber producers and retailers in Alaska is the relatively large proportion of knots, natural discolorations, and other defects found relative to competing hardwoods. Throughout this paper, all birch species growing in Alaska, including Betula papyrifera (paper birch) and Betula kenacia (Kenai birch), will be referred to as Alaska birch. Within Alaska, birch forests predominate in the interior and south-central regions of the state, covering tens of millions of acres. The total volume of standing sawtimber for all commercial species in interior Alaska is estimated to be 31 billion board feet (BBF) (Wheeler200l), and Alaska birch accounts for about 8 percent of this total (approximately 2.5 BBF). Despite this abundance, it is estimated that only 19 sawmills, many of which operate part time, process even small amounts of birch (Parrent 2000). Almost all the birch lumber produced in Alaska is used within the state. The presence of knots, bark pockets, and other character mark features in Alaska birch is a disadvantage when selling lumber under standard National Hardwood Lumber Association (NHLA) lumber grades (NHLA 1998). However, several studies have shown that consumers may be willing to accept charactermarked hardwood lumber for certain applications, and that inclusion of knots can lead to yield improvements and costs savings (Wiedenbeck and Buehlmann 1995, Buehlmann et a1. 1998). Abstract Alaska birch lumber has a higher occurrence of defects (knots, bark pockets, flecks, spalting, etc.) when compared to competing hardwoods. These defects are a disadvantage when birch lumber is graded under standard National Hardwood Lumber Association (NHLA) grading rules. This paper examines whether defects and other character markings found in birch lumber may be an advantage for certain applications. Contingent valuation techniques are used to determine the willingness of consumers to pay a price premium for kitchen cabinet doors made from Alaska birch lumber containing a variety of character features. Results show that consumers prefer cabinet doors with knots and color variation, and that in general, doors with more character marks are preferred to those with less. In addition, consumers were willing to pay price premiums of between $13 and $43 for their favorite door. Further, results indicated that women tend to prefer cabinet doors with fewer or no character marks, while men prefer doors with higher levels of these features. Bumgardner et a1. (2001a) evaluated consumer preferences for oak furniture containing three classes of character marks. Preference scores were found to be inversely related to knot size. However, this study found that knot size accounted for only 35 percent of the importance in buying decisions, and that there are opportunities for manufacturers to increase their use of lumber containing small character marks, Jahn et a1. (200]) studied consumer preferences for character-marked hardwood cabinet doors. This study found that the presence of character features was unimportant to 73 percent of those sampled. For the remaining 27 percent of the sample, character marks were the most important attribute influencing their choice of cabinet door. This char-