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Market Segmentation And Willingness To Pay For Organic Products In Spain

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  • Gil, Jose Maria
  • Gracia, Azucena
  • Sanchez Garcia, Mercedes

Abstract

In recent years, consumer concerns on environmental and health issues related to food products have increased and, as a result, the demand for organically grown production has grown. Higher costs of production and retailer margins generate a gap between real prices and those that consumers are willing to pay for organic food. In this article, consumer willingness to pay for organic food in two Spanish regions is analyzed. Markets in both regions are segmented considering consumers lifestyles. Results indicate that consumers concerned about healthy diet and environmental degradation are the most likely to buy organic food, and are willing to pay a high premium. Organic attributes are easily identified in perishable products as the premium consumers would pay for organic meat, fruits, and vegetables is higher.

Suggested Citation

  • Gil, Jose Maria & Gracia, Azucena & Sanchez Garcia, Mercedes, 2000. "Market Segmentation And Willingness To Pay For Organic Products In Spain," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 3(02).
  • Handle: RePEc:ags:ifaamr:34279
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    References listed on IDEAS

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    1. John D. Mullen & Michael K. Wohlgenant, 1991. "The Willingness Of Consumers To Pay For Attributes Of Lamb," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 35(3), pages 247-262, December.
    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. Baker, Gregory A. & Crosbie, Peter J., 1993. "Measuring Food Safety Preferences: Identifying Consumer Segments," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(02), December.
    4. Grunert, Suzanne C. & Juhl, Hans Jorn, 1995. "Values, environmental attitudes, and buying of organic foods," Journal of Economic Psychology, Elsevier, vol. 16(1), pages 39-62, March.
    5. Jordan, Jeffrey L. & Elnagheeb, Abdelmoneim H., 1991. "Public Perceptions Of Food Safety," Journal of Food Distribution Research, Food Distribution Research Society, vol. 22(3), September.
    6. W. Michael Hanemann, 1984. "Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 332-341.
    7. Biing-Hwan Lin & Steven Payson & Jane Wertz, 1996. "Opinions of professional buyers toward organic produce: A case study of mid-Atlantic market for fresh tomatoes," Agribusiness, John Wiley & Sons, Ltd., vol. 12(1), pages 89-97.
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    Keywords

    Demand and Price Analysis;

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