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Willingness-to-Pay for Organic Food Products and Organic Purity: Experimental Evidence

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  • Strzok, Jesse Lance

Abstract

The market for organic products has been growing rapidly over the past decade, and is now available not only in specialty stores like Whole Foods but also in Hy-Vee and other large grocery stores and super markets. Even Wal-Mart and Target carry organic produce and dairy products. This paper uses information collected in laboratory xperiments to test the hypothesis that some consumers are willing-to-pay more for organic than conventional food and that they will pay more for organic food with higher degrees of organic purity. The participants in the experiments are from the Ames, Iowa area. The experimental products are organic and conventional coffee, maple syrup and olive oil. We found that participants were willing to pay higher prices for an organic product with high levels of organic purity. Also, individuals with more education were willing to pay more for organic relative to conventional products, and additional household income (per capita basis) increased willingness-to-pay for organic products up to $85,400, and willingness-to-pay decreased as per capita household income increased above $85,400.

Suggested Citation

  • Strzok, Jesse Lance, 2012. "Willingness-to-Pay for Organic Food Products and Organic Purity: Experimental Evidence," ISU General Staff Papers 201201010800003857, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201201010800003857
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    References listed on IDEAS

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    1. Yue, Chengyan & Alfnes, Frode & Jensen, Helen H., 2009. "Discounting Spotted Apples: Investigating Consumers' Willingness to Accept Cosmetic Damage in an Organic Product," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 41(1), pages 29-46, April.
    2. Shogren, Jason F. & Margolis, Michael & Koo, Cannon & List, John A., 2001. "A random nth-price auction," Journal of Economic Behavior & Organization, Elsevier, vol. 46(4), pages 409-421, December.
    3. Yue, Chengyan & Alfnes, Frode & Jensen, Helen H., 2009. "Discounting Spotted Apples: Investigating Consumersï¾’ Willingness to Accept Cosmetic Damage in an Organic Product," Staff General Research Papers Archive 12693, Iowa State University, Department of Economics.
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