Consumer demand for organic produce in the United States
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This dissertation addresses several important issues on consumer demand for fresh organic produce in the United States in recent years using scanner data. It consists of three studies encompassing organic produce consumption, the interrelationship between organic and conventional produce demand, and organic price premiums paid by U.S. households. The results of this research have implications for organic retailers in formulating organic produce marketing strategies and organic producers in making production decisions. The first study is intended to identify important consumer demographic characteristics related to the growth of the fresh organic produce market with a generalized double hurdle model. Natural logarithm transformed consumption data were used to deal with the nonnormality problem usually associated with such data. Market participation and conditional/unconditional consumption elasticities were computed for the generalized double hurdle model. The second study provides an overview of the organic fresh vegetable market by investigating market shares and price premiums of selected organic fresh vegetables and estimating the interrelationship between consumer demand for organic and conventional fresh vegetables. The linear Almost Ideal Demand System was found to fit the data best among alternative demand models. Expenditure, own, and cross price elasticities were computed for both organic and conventional vegetables based on the best fitting model. Using multivariate regression on data for prices with respect to produce characteristics, buyer demographics, and interactions, the third study investigates the organic price premiums U.S. consumers have paid for selected produce and identifies factors explaining variation in organic price premiums. The econometric problem, with each buyer having multiple records in the purchase data, is addressed in the model.