Household Willingness to Pay for Organic Products
58 Pages Posted: 20 Aug 2008
Date Written: July 2008
Abstract
We use hedonic prices and purchase quantities to consider what can be learned about household willingness to pay for baskets of organic products and how this varies across households. We use rich scanner data on food purchases by a large number of households to compute household specific lower and upper bounds on willingness to pay for various baskets of organic products. These bounds provide information about willingness to pay for organic without imposing restrictive assumptions on preferences. We show that the reasons households are willing to pay vary, with quality being the most important, health concerns coming second, and environmental concerns lagging far behind. We also show how these methods can be used for example by stores to provide robust upper bounds on the revenue implication of introducing a new line of organic products.
Keywords: hedonic prices, organic, willingness to pay
JEL Classification: D12, L81, Q51
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Identification and Estimation of Hedonic Models
By Ivar Ekeland, James J. Heckman, ...
-
Estimating Equilibrium Models of Local Jurisdictions
By Dennis Epple and Holger Sieg
-
Identification and Estimation of Hedonic Models
By Ivar Ekeland, James J. Heckman, ...
-
By C. Lanier Benkard and Patrick Bajari
-
By C. Lanier Benkard and Patrick Bajari
-
By C. Lanier Benkard and Patrick Bajari
-
A Unified Framework for Measuring Preferences for Schools and Neighborhoods
By Patrick J. Bayer, Robert Mcmillan, ...
-
A Unified Framework for Measuring Preferences for Schools and Neighborhoods
By Patrick J. Bayer, Fernando V. Ferreira, ...