Willingness-to-pay for organic food products and organic purity: experimental evidence

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 experiments 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, IA 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 addition household income (per capita basis) increases willingness-to-pay for organic products up to $76,100, and willingness-to-pay decreased as per capita household income increased above $76,100.