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Organic Premiums of U.S. Fresh Produce

  • Smith, Travis A.
  • Lin, Biing-Hwan
  • Huang, Chung L.

The study uses the 2005 Nielsen Homescan panel data to estimate price premiums and discounts associated with product attributes, market factors, and consumer characteristics, focusing on the organic attribute for 5 major fresh fruits and 5 major fresh vegetables in the United States. The results suggest that the organic attribute commands a significant price premium, which varies greatly from 13 cents per pound for bananas to 86 cents per pound for strawberries among fresh fruits and from 13 cents per pound for onions to 50 cents per pound for peppers among fresh vegetables. In terms of percentages, the estimated organic price premiums vary from 20% above prices paid for conventional grapes to 42% for strawberries among fresh fruits and from 15% above prices paid for conventional carrots and tomatoes to 60% for potatoes. Furthermore, prices paid for fresh produce are found to vary by other product attributes, market factors, and household characteristics.

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File URL: http://purl.umn.edu/37626
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Paper provided by NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management in its series 2008 Conference, April 21-22, 2008, St. Louis, Missouri with number 37626.

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Date of creation: 2008
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Handle: RePEc:ags:nccest:37626
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  1. Maria Luz Loureiro & Jill J. McCluskey, 2000. "Assessing consumer response to protected geographical identification labeling," Agribusiness, John Wiley & Sons, Ltd., vol. 16(3), pages 309-320.
  2. Mykel R. Taylor & Gary W. Brester, 2005. "Noncash Income Transfers and Agricultural Land Values," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(4), pages 526-541.
  3. Bodo E. Steiner, 2004. "Australian wines in the British wine market: A hedonic price analysis," Agribusiness, John Wiley & Sons, Ltd., vol. 20(3), pages 287-307.
  4. Govindasamy, Ramu & Italia, John, 1999. "Predicting Willingness-To-Pay A Premium For Organically Grown Fresh Produce," Journal of Food Distribution Research, Food Distribution Research Society, vol. 30(2), July.
  5. Halvorsen, Robert & Pollakowski, Henry O., 1981. "Choice of functional form for hedonic price equations," Journal of Urban Economics, Elsevier, vol. 10(1), pages 37-49, July.
  6. Maguire, Kelly B. & Owens, Nicole N. & Simon, Nathalie B., 2004. "The Price Premium for Organic Babyfood: A Hedonic Analysis," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(01), April.
  7. Loureiro, Maria L. & Hine, Susan E., 2002. "Discovering Niche Markets: A Comparison Of Consumer Willingness To Pay For Local (Colorado Grown), Organic, And Gmo-Free Products," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(03), December.
  8. 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.
  9. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
  10. Dimitri, Carolyn & Greene, Catherine R., 2002. "Recent Growth Patterns In The U.S. Organic Foods Market," Agricultural Information Bulletins 33715, United States Department of Agriculture, Economic Research Service.
  11. Boland, Michael A. & Schroeder, Ted C., 2002. "Marginal Value Of Quality Attributes For Natural And Organic Beef," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(01), April.
  12. repec:jaa:jagape:v:34:y:2002:i:3:p:477-487 is not listed on IDEAS
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