Traceability systems are recordkeeping systems that keep product information from the creation through marketing. Such systems are important in ensuring food safety and consumer welfare, particularly when information asymmetric exists. Consequently, the government has introduced the voluntarily traceability system for agricultural products in 2004. Using tea with traceability system as an example, the purpose of this study is to examine if traceability is an effective cue in impacting consumer?s perceived quality via perceived warranty and perceived price. In addition, this study also investigated whether perceived warranty induced by traceability system enhances perceived value and thus consumer?s purchase intention, based on Monroe and Krishnan (1985). The study found that both perceived price and perceived warranty are effective cues for perceived quality which in turn positively enhances perceived value and purchase intention. Furthermore, this study also found that product price has a positive effect on both perceived quality and perceived sacrifice. All of these findings further confirmed Krishnan?s (1985) and Zeithaml?s (1988) proposition that perceived value is the most important factor influencing consumer?s purchase intention and that perceived value is a result of moderating effect between perceived quality and perceived sacrifice.
