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The Organic Food Premium: A Local Assessment in the UK

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  • Adelina Gschwandtner

Abstract

The present study combines stated and revealed preferences in order to estimate the hypothetical bias of a sample of organic food consumers from Canterbury in the UK. It uses contingent valuation and hedonic pricing to compare stated and revealed preferences, and employs the Almost Ideal Demand System to estimate the elasticity of organic products. The results show that the average price premium is fairly large (approximately 10%). They also demonstrate, crucially, that the size of this estimate is encouragingly similar whether a willingness-to-pay or hedonic pricing method is used. The estimated elasticity of organic products is on average >1, suggesting an elastic response to pricing policy in the present sample. Desirable next steps and potential policy applications for future research are also discussed.

Suggested Citation

  • Adelina Gschwandtner, 2018. "The Organic Food Premium: A Local Assessment in the UK," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 25(2), pages 313-338, May.
    • Handle: RePEc:taf:ijecbs:v:25:y:2018:i:2:p:313-338
    DOI: 10.1080/13571516.2017.1389842
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    Cited by:

    1. Ribeiro, Jose Eduardo & Gschwandtner, Adelina & Revoredo-Giha, Cesar, 2021. "Estimation of a Hedonic Price Equation for Chicken Meat in the UK: Does the Organic Attribute Matter?," 2021 Conference, August 17-31, 2021, Virtual 314942, International Association of Agricultural Economists.
    2. András István Kun & Marietta Kiss, 2021. "On the Mechanics of the Organic Label Effect: How Does Organic Labeling Change Consumer Evaluation of Food Products?," Sustainability, MDPI, vol. 13(3), pages 1-25, January.
    3. Ragbir, Nadine K. & Rice, Stephen & Winter, Scott R. & Choy, Elaine C., 2021. "Emotions and caring mediate the relationship between knowledge of sustainability and willingness to pay for greener aviation," Technology in Society, Elsevier, vol. 64(C).
    4. Jae-Jang Yang & Rajesh Iyer & Yong-Ki Lee, 2022. "Why Do Local Foodscapes Matter in Building Tourist Trust and Loyalty?," Sustainability, MDPI, vol. 14(4), pages 1-16, February.

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