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Consumer Choice of Private Label or National Brand: The case of organic and non-organic milk

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Author Info

  • Zhuang, Yan
  • Dimitri, Carolyn
  • Jaenicke, Edward C.

Abstract

We use a two-stage, sample selection model to investigate organic milk purchases using Neilsen’s Homescan data. In the first stage, households decide on a weekly basis to buy mainly organic milk or non-organic milk. Results from this stage show that higher income, better education, having children at home, and several other demographic and marketing variables have a positive effect on organic choice. In the second stage, consumers then choose to buy mainly private label milk or national brand milk conditional on their first-stage choice. Most demographic and marketing variables are found to affect the organic and non-organic private label decision in the same way. However, our results show that a few factors, such as marriage status and children, affect the private label decision differently for organic and non-organic milk customers.

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Bibliographic Info

Paper provided by Agricultural and Applied Economics Association in its series 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin with number 49207.

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Date of creation: Apr 2009
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Handle: RePEc:ags:aaea09:49207

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Keywords: organic milk; private label; sample selection; Agribusiness; Consumer/Household Economics; Demand and Price Analysis;

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  1. Keane, Michael P, 1997. "Modeling Heterogeneity and State Dependence in Consumer Choice Behavior," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(3), pages 310-27, July.
  2. 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.
  3. Bonanno Alessandro & Lopez Rigoberto A., 2005. "Private Label Expansion and Supermarket Milk Prices," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 3(1), pages 1-18, February.
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Cited by:
  1. Schroeter Christiane & Cai Xiaowei, 2012. "The Impact of Food Environment on Private Label versus Branded Produce Choice," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 10(1), pages 1-23, November.
  2. Schroeter, Christiane & Cai, Xiaowei, 2012. "The Impact of Food Environment on Branded vs. Private Label Produce Choice," 2012 AAEA/EAAE Food Environment Symposium, May 30-31, Boston, MA 123197, Agricultural and Applied Economics Association.
  3. Taglioni, Chiara & Cavicchi, Alessio & Torquati, Biancamaria & Scarpa, Riccardo, 2011. "Influence of Brand Equity on Milk Choice: A Choice Experiment Survey," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 2(3).

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