A Hedonic Approach Towards Explaining Market Shares of Organic Food - Evidence from Swiss Household Data

Franziska Götze, Stefan Mann (), Ali Ferjani, Andreas Kohler and Thomas Heckelei

No 209204, 55th Annual Conference, Giessen, Germany, September 23-25, 2015 from German Association of Agricultural Economists (GEWISOLA)

Abstract: The market share of organic food in Switzerland is high compared with that in other European countries, and has grown notably in recent years. However, little is known about why the market share of certain organic food products is higher than that of others. Swiss household expenditure data distinguishing between organic and conventional products allow an analysis at the product level. As a result, factors which determine the market share level of different organic food products are identified. Based on the results of the analysis, the driving factors are categorised into three dimensions. First, a low level of processing is positively related to a high organic market share, suggesting that communicating the benefits of organic food is more successful for unprocessed than for processed products. Second, it appears that the organic consumer in Switzerland is rather critical about buying products that are relatively expensive compared to their conventional counterpart. Products with high price premiums as well as products that are of particular importance for the household in terms of its food budget, therefore, have a clear disadvantage on the market, suggesting that consumers of organic food are price-conscious. Third, Swiss consumers seem to have a high preference for domestically produced organic products, since the characteristic of being an imported product is negatively related to the organic market share level. The results give a first understanding of what is important to Swiss consumers when it comes to the consumption of organic food and imply that supporting organic food production in Switzerland is still promising from a policy perspective as long as the price premium for organic quality stays at a reasonable level.

Keywords: Consumer/Household Economics; Food Consumption/Nutrition/Food Safety (search for similar items in EconPapers)
Pages: 13
Date: 2015
New Economics Papers: this item is included in nep-agr, nep-eur and nep-mkt
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Persistent link: https://EconPapers.repec.org/RePEc:ags:gewi15:209204

DOI: 10.22004/ag.econ.209204

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