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

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  • 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.

Suggested Citation

  • Zhuang, Yan & Dimitri, Carolyn & Jaenicke, Edward C., 2009. "Consumer Choice of Private Label or National Brand: The case of organic and non-organic milk," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49207, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea09:49207
    DOI: 10.22004/ag.econ.49207
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    References listed on IDEAS

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    1. Peter M. Guadagni & John D. C. Little, 1983. "A Logit Model of Brand Choice Calibrated on Scanner Data," Marketing Science, INFORMS, vol. 2(3), pages 203-238.
    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. 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 310-327, July.
    4. Størdal, Ståle & Lien, Gudbrand & Baardsen, Sjur, 2008. "Analyzing determinants of forest owners' decision-making using a sample selection framework," Journal of Forest Economics, Elsevier, vol. 14(3), pages 159-176, June.
    5. 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 Branded vs. Private Label Produce Choice," 2012 AAEA/EAAE Food Environment Symposium 123197, Agricultural and Applied Economics Association.
    2. 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.
    3. Schroeter, Christiane & Cai, Xiaowei, 2011. "It’s All About Produce: Flexing the Muscles of Western U.S. Organic Spinach Consumption," Western Economics Forum, Western Agricultural Economics Association, vol. 10(2), pages 1-13.
    4. 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), pages 1-21, December.

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    Keywords

    Agribusiness; Consumer/Household Economics; Demand and Price Analysis;
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