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Demand for Organic and Conventional Potatoes

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  • Hsieh, Ming- Feng
  • Mitchell, Paul D.
  • Stiegert, Kyle W.

Abstract

We investigate pricing and demand issues for four fresh potato categories (russet, red, white, and minor colored), organic fresh potatoes, and two processed potato categories (frozen/refrigerated and dehydrated) using a nonlinear generalized almost ideal demand system (GAIDS) that is closed under unit scaling (CUUS). We identify five major findings. First, we found little evidence for potato demand differences among the four U.S. regions in our study (east, west, north, and south). Second, increased consumer preferences for organic food consumption have caused price declines for red, russet and minor colored potatoes while organic potato prices rose significantly. Third, white potatoes emerged from the study as apparently the non-organic category most able to compete in an increasingly organicallyoriented market. Fourth, potatoes as an aggregate commodity are inferior good, with perhaps the exception being the minor colored potatoes. Fifth, the potato market competes with other carbohydrate groups. In particular, we find strong statistical support that lower bread or frozen vegetables prices implying reduced system expenditures on potatoes and for dehydrated potato demand being sensitive to competing carbohydrate prices.

Suggested Citation

  • Hsieh, Ming- Feng & Mitchell, Paul D. & Stiegert, Kyle W., 2007. "Demand for Organic and Conventional Potatoes," Working Papers 201522, University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Food System Research Group.
    • Handle: RePEc:ags:uwfswp:201522
    DOI: 10.22004/ag.econ.201522
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    File URL: https://ageconsearch.umn.edu/record/201522/files/wp2007-01.pdf
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    References listed on IDEAS

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    1. Richards, T.J. & Kagan, A. & Gao, X.M., 1997. "Factors Influencing Changes in Potato and Potato Substitute Demand," Agricultural and Resource Economics Review, Cambridge University Press, vol. 26(1), pages 52-66, April.
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    3. Richards, Timothy J. & Kagan, Albert & Gao, Xiaoming, 1997. "Factors Influencing Changes In Potato And Potato Substitute Demand," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 26(1), pages 1-15, April.
    4. Bollino, Carlo Andrea, 1987. "Gaids: a generalised version of the almost ideal demand system," Economics Letters, Elsevier, vol. 23(2), pages 199-202.
    5. Alston, Julian M. & Chalfant, James A. & Piggott, Nicholas E., 2001. "Incorporating demand shifters in the Almost Ideal demand system," Economics Letters, Elsevier, vol. 70(1), pages 73-78, January.
    6. Wyatt Thompson, 2004. "Using Elasticities from an Almost Ideal Demand System? Watch Out for Group Expenditure!," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 1108-1116.
    7. X. M. Gao & Timothy Richards & Albert Kagan, 1997. "A latent variable model of consumer taste determination and taste change for complex carbohydrates," Applied Economics, Taylor & Francis Journals, vol. 29(12), pages 1643-1654.
    8. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, September.
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    Cited by:

    1. Mosadegh Sedghy, B. & Nematollahi, Mohammadreza & Tajbakhsh, Alireza, 2024. "Market dynamics between retail channels and short food supply chains: A case of organic fruits," Journal of Retailing and Consumer Services, Elsevier, vol. 79(C).

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