Consumer preferences and willingness to pay for organic apples

Abstract

This study provides marketing data regarding consumer preferences and willingness to pay for organic agricultural products in Chile. The main objectives of this study were to assess consumer willingness to pay for organic apples and to determine the main attributes that consumers look for when purchasing apples. The methodology applied to reach the first objective was the contingent valuation method using a logistic probability function and a single-bound dichotomous choice format. Additionally, this study estimates the marginal willingness to pay (WTP) of consumers for organic apples by using conjoint analysis with ranking procedures. This study was performed in the city of Talca, Chile, where a total of 400 individuals from a probability sampling were interviewed. The results of our study show that the estimation of part-worth utilities of each attribute confirms that the Fuji variety, organic method of production, sweet apples and lowest price are the most preferred levels of each attribute. However, an analysis of the relative utility index shows that price and variety are much more important to consumer choice and behavior than the method of production and flavor. Finally, our study shows a positive willingness to pay an additional 130 Chilean pesos per kilogram for organic apples and a greater preference for apples produced organically than by conventional methods. These results provide important information about market opportunities as well as policy implementation regarding the production of organic agricultural products.