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Comparing Parts with the Whole: Willingness to Pay for Pesticide-Free, Non-GM, and Organic Potatoes and Sweet Corn

  • Bernard, John C.
  • Bernard, Daria J.

Auction experiments were used to investigate demand relationships and willingness to pay (WTP) for four versions of potatoes and sweet corn—conventional, organic, and two parts of organic: no pesticides and non-genetically modified (non-GM). Elasticities showed strong and asymmetric substitute relationships between organic and its parts. Combined premiums of the parts were not significantly different than the whole organic premium, suggesting WTP for the attributes are not additive. A two-stage heteroskedastic tobit model found significant WTP for each part dependent on demographics and beliefs about conventional versions. Results suggest segments for parts of organic could be established alongside the whole.

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File URL: http://purl.umn.edu/97858
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Article provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.

Volume (Year): 35 (2010)
Issue (Month): 3 (December)
Pages:

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Handle: RePEc:ags:jlaare:97858
Contact details of provider: Web page: http://waeaonline.org/
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  1. Huang, Chung L, 1996. "Consumer Preferences and Attitudes towards Organically Grown Produce," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 23(3), pages 331-42.
  2. Nalley, Lawton Lanier & Hudson, Darren & Parkhurst, Gregory M., 2006. "Consistency of Consumer Valuation Under Different Information Sets: An Experimental Auction with Sweet Potatoes," Journal of Food Distribution Research, Food Distribution Research Society, vol. 37(03), November.
  3. John Bernard, 2005. "Evidence of affiliation of values in a repeated trial auction experiment," Applied Economics Letters, Taylor & Francis Journals, vol. 12(11), pages 687-691.
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