Got Organic Milk? Consumer Valuations of Milk Labels after the Implementation of the USDA Organic Seal

Kristin Kiesel and Sofia Villas-Boas

No 7187, CUDARE Working Papers from University of California, Berkeley, Department of Agricultural and Resource Economics

Abstract: This paper investigates consumer reactions to changes in information provision regarding organic production. Quantitative analyses focus on the actual implementation of mandatory labeling guidelines under the National Organic Program. The unique nature of the fluid milk market in combination with these regulatory changes allows us to place a value on information sets under different labeling regimes. Hedonic price functions provide an initial reference point for analyses of individual responses. A random utility discrete choice model serves as the primary econometric specification and allows consideration of consumer preference heterogeneity along observable household demographics. Our results indicate that the USDA organic seal increases the probability of purchasing organic milk. An initial hedonic price function approach, as well as simulations within the discrete choice framework, suggests that consumers value the change in labeling regulations with regard to organic production. Our results further suggest that consumers substitute away from milk carrying the rBGH-free label. This may indicate that consumers pay less attention to these labels in the time period investigated compared to results found in studies that use earlier time periods.

Keywords: Consumer/Household Economics; Livestock Production/Industries (search for similar items in EconPapers)
Pages: 53
Date: 2007
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Citations: View citations in EconPapers (59)

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https://ageconsearch.umn.edu/record/7187/files/wp071024.pdf (application/pdf)

Related works:
Journal Article: Got Organic Milk? Consumer Valuations of Milk Labels after the Implementation of the USDA Organic Seal (2007)
Working Paper: Got Organic Milk? Consumer Valuations of Milk Labels after the Implementation o f the USDA Organic Seal (2007)
Working Paper: Got Organic Milk? Consumer Valuations of Milk Labels after the Implementation of the USDA Organic Seal (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ucbecw:7187

DOI: 10.22004/ag.econ.7187

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