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The Demand for Organic Food in the U.S.: An Empirical Assessment

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  • Li, Jinghan
  • Zepeda, Lydia
  • Gould, Brian W.
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    Abstract

    This analysis examines the determinants of organic food purchase behavior of a random sample of U.S. food shoppers. We analyze food expenditures conditional upon whether a household purchases organic foods. The results from our econometric modeling effort identify shopping venue, awareness of the organic label, positive beliefs toward organic foods, a positive attitude toward cooking, and a lack of religious affiliation as being important determinants of organic food purchases. Income was not found to significantly affect the decision to buy organic foods. Our results suggest that the limiting factors of the organic food market are search cost, dietary patterns, and awareness of the organic food label. Given the recent “Wal-Mart†effect on the organic food market, it is anticipated that these search costs will decrease as organic foods become more widely available.

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    File URL: http://purl.umn.edu/46587
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    Bibliographic Info

    Article provided by Food Distribution Research Society in its journal Journal of Food Distribution Research.

    Volume (Year): 38 (2007)
    Issue (Month): 3 (November)
    Pages:

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    Handle: RePEc:ags:jlofdr:46587

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    Web page: http://fdrs.ag.utk.edu/
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    Related research

    Keywords: Demand and Price Analysis; Food Consumption/Nutrition/Food Safety;

    References

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    1. Dimitri, Carolyn & Greene, Catherine R., 2002. "Recent Growth Patterns In The U.S. Organic Foods Market," Agricultural Information Bulletins 33715, United States Department of Agriculture, Economic Research Service.
    2. Gould, Brian W. & Lin, Huei Chin, 1994. "Nutrition Information And Household Dietary Fat Intake," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(02), December.
    3. Leibtag, Ephraim S., 2005. "Where You Shop Matters: Store Formats Drive Variation in Retail Food Prices," Amber Waves, United States Department of Agriculture, Economic Research Service, November.
    4. Dimitri, Carolyn & Oberholtzer, Lydia, 2005. "Organic Price Premiums Remain High," Amber Waves, United States Department of Agriculture, Economic Research Service, September.
    5. Wang, Qingbin & Sun, Junjie, 2003. "Consumer Preference And Demand For Organic Food: Evidence From A Vermont Survey," 2003 Annual meeting, July 27-30, Montreal, Canada 22080, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Gifford, Katie & Bernard, John C., 2004. "The Impact of Message Framing on Organic Food Purchase Likelihood," Journal of Food Distribution Research, Food Distribution Research Society, vol. 35(03), November.
    7. Nayga, Rodolfo M., Jr., 1995. "Determinants Of U.S. Household Expenditures On Fruit And Vegetables: A Note And Update," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 27(02), December.
    8. Zepeda, Lydia & Li, Jinghan, 2007. "Characteristics of Organic Food Shoppers," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 39(01), April.
    9. Ayal Kimhi, 1999. "Estimation of an endogenous switching regression model with discrete dependent variables: Monte-Carlo analysis and empirical application of three estimators," Empirical Economics, Springer, vol. 24(2), pages 225-241.
    10. Underhill, Sheila E. & Figueroa, Enrique E., 1996. "Consumer Preferences For Non-Conventionally Grown Produce," Journal of Food Distribution Research, Food Distribution Research Society, vol. 27(2), July.
    11. Klonsky, Karen & Greene, Catherine R., 2005. "Widespread Adoption of Organic Agriculture in the US: Are Market-Driven Policies Enough?," 2005 Annual meeting, July 24-27, Providence, RI 19382, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Gary D. Thompson & Julia Kidwell, 1998. "Explaining the Choice of Organic Produce: Cosmetic Defects, Prices, and Consumer Preferences," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(2), pages 277-287.
    13. Lee, Lung-Fei & Trost, Robert P., 1978. "Estimation of some limited dependent variable models with application to housing demand," Journal of Econometrics, Elsevier, vol. 8(3), pages 357-382, December.
    14. Greene, Catherine R. & Kremen, Amy, 2003. "U.S. Organic Farming In 2000-2001: Adoption Of Certified Systems," Agricultural Information Bulletins 33769, United States Department of Agriculture, Economic Research Service.
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    Cited by:
    1. Schroeck, Rebecca, 2011. "A Demand System Analysis of Organic and Conventional Fresh Milk in Germany Segmented by Consumer Groups," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 115995, European Association of Agricultural Economists.
    2. Chad M. Baum, 2013. "The Missing Link between Research and Reality: the significance of the relationship between retail format and organic food consumption," Jena Economic Research Papers 2013-049, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
    3. Wirth, Ferdinand F. & Stanton, John L. & Wiley, James B., 2011. "The Relative Importance of Search versus Credence Product Attributes: Organic and Locally Grown," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 40(1), April.

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