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Putting their money where their mouths are: Consumer willingness to pay for multi-ingredient, processed organic food products

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  • Batte, Marvin T.
  • Hooker, Neal H.
  • Haab, Timothy C.
  • Beaverson, Jeremy

Abstract

In response to dramatically increasing adoption in consumer markets, the National Organic Program (NOP) initiated novel labeling standards for food products in the U.S. in 2002. This program is a particularly relevant standardization effort for multi-ingredient processed foods. Rather than a simple binary message (organic or not), gradations of organic content are now codified. No existing published study evaluates consumer willingness to pay or motivation to purchase in response to such a rich organic label. This article presents evidence of the impact of the NOP through analysis of data collected in seven central Ohio, USA grocery stores. Results suggest that consumers are willing to pay premium prices for organic foods, even those with less than 100 percent organic ingredients. The magnitudes of WTP premia varied significantly among consumer groups, suggesting that targeted marketing may be effective for organic merchandisers.
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Suggested Citation

  • Batte, Marvin T. & Hooker, Neal H. & Haab, Timothy C. & Beaverson, Jeremy, 2007. "Putting their money where their mouths are: Consumer willingness to pay for multi-ingredient, processed organic food products," Food Policy, Elsevier, vol. 32(2), pages 145-159, April.
    • Handle: RePEc:eee:jfpoli:v:32:y:2007:i:2:p:145-159
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    More about this item

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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