Consumers' willingness to pay for organic food: Factors that affect it and variation per organic product type

Abstract

Purpose: Seeks to provide answers to two questions: is willingness to pay (WTP) for organic products influenced by the same set of factors that affect purchasing of conventional foods? Does WTP for organic products vary according to different food categories? Design/methodology/approach: Purchasers were approached during their food shopping in retail chains in Athens in July 2003. Sample inclusion is based on real awareness of the term “organic”. The questionnaire included in its first part a number of criteria that influence consumers when buying food. In the second part respondents were asked to indicate if any food products they buy were organic and to state how much more they were willing to pay. Information from the first part was analysed with factor analysis. With the help of t‐value analysis, it was examined whether there is a statistically significant difference per product category between consumers who are willing to pay and consumers who are unwilling to pay in terms of the factors identified. Findings: Consumers' stated WTP and the type and magnitude of factors that affect it differ according to the organic food category. These factors include food quality and security, trust in the certification, and, for some products, brand name. Organoleptic characteristics, prices and consumers' socio‐demographic profiles do not constitute determinants of organic WTP. Research limitations/implications: Organic types of some fresh as well as processed food products do not exist in the Greek market. Moreover, the large number of t‐tests conducted might result in Type I error. Originality/value: Purchasing of organic food follows “basic‐highest frequency”, “basic‐average frequency”, and “non‐basic” discrimination. The most frequently consumed organic products are some basic components of the Greek diet. Only the factors “quality and security” and “trust” play an important role in defining WTP for most organic food categories. Consumers' attitudes towards both organic and PDO/PGI certifications converge towards a perception of high quality food. Approximately 26 percent of the sample exhibited a U‐shaped WTP trend for 14 out of 16 organic food categories in increments from 45 to 120 percent. All the above elements of originality are particularly valuable for organic food firms and policy/decision makers.