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Demand for Organic Fluid Milk across Marketing Channels

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  • Li, Xianghong
  • Peterson, Hikaru Hanawa
  • Xia, Tian

Abstract

Organic food products, which have been sold traditionally at natural food stores, have become increasingly available through mass marketing channels. This study estimated an almost ideal demand system (AIDS) model using 2008–2010 retail scanner data to examine consumer demand for organic fluid milk products sold at conventional and natural marketing channels. Asymmetric cross-price elasticities were found suggesting relative stickiness in demand to switch from organic milk to conventional milk and from natural stores to food, drug, and mass merchandiser stores. More generally, demands shifting toward products with higher expenditure elasticities in a differentiated market can be explained by relative budget shares and expenditure elasticities.

Suggested Citation

  • Li, Xianghong & Peterson, Hikaru Hanawa & Xia, Tian, 2018. "Demand for Organic Fluid Milk across Marketing Channels," Agricultural and Resource Economics Review, Cambridge University Press, vol. 47(3), pages 505-532, December.
    • Handle: RePEc:cup:agrerw:v:47:y:2018:i:03:p:505-532_00
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    Cited by:

    1. Ghazaryan, Armen & Bonanno, Alessandro & Carlson, Andrea, 2023. "I Say Milk, You Say Mylk. Demand Separability in a Broadened Milk Category," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 48(2), May.
    2. Tanushree Haldar & A. Damodaran, 2022. "Can cooperatives influence farmer’s decision to adopt organic farming? Agri-decision making under price volatility," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(4), pages 5718-5742, April.

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