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Explaining Demand for Organic Foods

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  • Wier, Mette
  • Hansen, Lars Gårn
  • Smed, Sinne

Abstract

We analyse the consumption of organic foods in Denmark in the late 1990s. The aim of our study is to identify the influence of price premiums on buying propensity. The methodological approach is econometric estimation based on four-weekly observations of purchases of organic and conventional dairy products. We apply the AIDS demand system and estimate dynamic as well as static specifications, homothetic as well as nonhomothetic specifications, and furthermore specifications with and without trends. The preferred model is a homothetic, static model with a linear trend. The price elasticities estimated in our study are higher than those estimated in other studies on food demand. In the end of the paper, we outline our current research on organic foods.

Suggested Citation

  • Wier, Mette & Hansen, Lars Gårn & Smed, Sinne, 2001. "Explaining Demand for Organic Foods," MPRA Paper 48363, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:48363
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    References listed on IDEAS

    as
    1. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    2. Andrew C. Harvey, 1990. "The Econometric Analysis of Time Series, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 026208189x, December.
    3. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    4. Kremers, Jeroen J M & Ericsson, Neil R & Dolado, Juan J, 1992. "The Power of Cointegration Tests," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 325-348, August.
    5. Stock, James H, 1987. "Asymptotic Properties of Least Squares Estimators of Cointegrating Vectors," Econometrica, Econometric Society, vol. 55(5), pages 1035-1056, September.
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    Cited by:

    1. Vasiliki Fourmouzi & Margarita Genius & Peter Midmore, 2012. "The Demand for Organic and Conventional Produce in London, UK: A System Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(3), pages 677-693, September.
    2. Katrin, Millock & Hansen, Lars Gårn, 2002. "Willingness to Pay for Organic Foods: A Comparison between Survey Data and Panel Data from Denmark," MPRA Paper 47588, University Library of Munich, Germany.
    3. Ramón López & Sang Won Yoon, 2013. "Sustainable Economic Growth: Structural Transformation with Consumption Flexibility," Working Papers wp375, University of Chile, Department of Economics.
    4. Neena Sondhi & Vina Vani, 2007. "An Empirical Analysis of the Organic Retail Market in the NCR," Global Business Review, International Management Institute, vol. 8(2), pages 283-302, December.
    5. Seidu, Ayuba & Seale, James, 2015. "Estimating Danish Consumers’ Preference for Organic Foods: Application of a Generalized Differential Demand System," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196809, Southern Agricultural Economics Association.
    6. Wier, Mette & Hansen, Lars Gaarn & Andersen, Laura Mørch, 2003. "Consumer preferences for organic foods," MPRA Paper 60539, University Library of Munich, Germany.

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    More about this item

    Keywords

    Organic food demand;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior

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