Price promotion of organic foods and consumer demand

Danhong Chen, Edward C. Jaenicke, Ji Yan, Kun Tian, Rodolfo Nayga

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)
8 Downloads (Pure)

Abstract

Existing studies have examined the demand elasticities for organic products only in select categories, and their results for consumers' sensitivity to price changes are inconsistent. Evidence regarding the effects of price promotions on the demand for organic foods vs non-organic foods is scarce. This study aims to (1) examine the own-price elasticities of organic foods vs non-organic counterparts both with and without a promotion in a variety of product categories, and (2) investigate how the distinctive promotion effects between organic and non-organic counterparts depend on food category features. Using purchase data for 36 food categories from the 2015 Nielsen Consumer Panel, we find differential own-price elasticities for organic and non-organic foods, regardless of whether the product is purchased with a promotion. When the products are purchased with a promotion, we find stronger price promotion effects of organic virtues than non-organic virtues and weaker price promotion effects of organic vices than conventional vices. Price promotions of organic foods are more likely to induce health-conscious consumers to switch from conventional purchases to organic purchases in virtues.

Original languageEnglish
Pages (from-to)618-623
Number of pages6
JournalRenewable Agriculture and Food Systems
Volume37
Issue number6
Early online date11 Sep 2021
DOIs
Publication statusPublished - Dec 2022

Keywords

  • Demand elasticity
  • organic vices
  • organic virtues

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