2017 Discussion papers
School of Economics Discussion Paper 17/02
The Willingness to Pay for Organic Attributes in the UK
Adelina Gschwandtner and Michael Burton
University of Kent and University of Western Australia
There has been almost no recent formal economic analysis of the WTP of British consumers
for organic products.
Given the rising demand for organic products on one hand and the
decline in the organically farmed area in the UK on the other hand, this is an important topic
to address. The present paper analyses the demand for organic products using both stated
and revealed preferences from exactly the same consumers. The stated preference model is
based on the respondent's choice from hypothetical choice sets. Attributes in the stated
preference model are based on the ranges of the actual levels of attributes found in shops
and are presented to respondents using a fractional factorial statistical design. Three
different hypothetical bias treatments are applied in order to reduce hypothetical bias. The
stated preference results are validated with the help of actual consumption data from the
weekly shopping of the same consumers. The results show that there exists a core of
organic consumers of about 20-30% of the sample that have a positive willingness to pay for
the organic label. However, consumers seem to be willing to pay more for other attributes
such as a higher quality, environmentally friendly production and no chemical usage. Attributes such as animal welfare, and a longer expiry date do not seem to have the same relevance for the UK consumers.
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