PurposeThe organic trade literature in the USA makes strong claims about the relationship between income, ethnicity, and other factors and the likelihood of purchasing organic food products. However, previous economic research focusing on the socio‐economic characteristics of organic food consumers yields mixed findings. One explanation for the literature's inconsistent findings is that most studies rely on one specific product or one region of the country, or base their analysis on data collected from in‐store surveys. Another shortcoming in the existing literature is the failure to account for how access to organic food influences the likelihood of buying organic food. This paper's goal is to identify what is known, as well as what is not known, about consumers of organic food.Design/methodology/approachThe paper extends the literature through the combination of a novel approach and unique dataset of US consumers, and addresses the relationship between demographic traits and the likelihood of buying organic food. The dataset consists of primary data recording all purchases of food as well as household demographic data, such as income, education, gender, and ethnicity, over a one‐year period for 44,000 households. The study uses different discrete choice models and multiple product categories to explore the likelihood of buying organic food from many angles, in order to assess the robustness of the statistical relationship between income, education, ethnicity, and other factors on the likelihood of buying organic food, as well as the frequency of buying organic food.FindingsThe results indicate that education has a strong effect on the likelihood of buying organic products, and that the impact of marital status, income, and access to organic are consistent across models. The findings also suggest that further research on the links between ethnicity and consumption of organic food is necessary.Research limitations/implicationsOne possible drawback to this dataset is that older, urban households are overrepresented, in comparison to the entire USA.Practical implicationsThese findings will appeal to those interested in consumer behavior in addition to those interested in organic food consumption, from both the research and trade perspectives. The research indicates that access to organic food is an important determinant of the likelihood of a household buying organic food, the industry in the USA can expand sales by increasing consumer access to organic food.Originality/valueThis paper's unique contribution is the exploration of the robustness of the impact of different factors on the likelihood of buying organic food. The inclusion of access to organic food is also new to the literature, and as expected, households with greater access to organic food are more likely to purchase organic food.
Production and marketing contracts govern 36 percent of the value of U.S. agricultural production, up from 12 percent in 1969. Contracts are now the primary method of handling sales of many livestock commodities, including milk, hogs, and broilers, and of major crops such as sugar beets, fruit, and processing tomatoes. Use of contracts is closely related to farm size; farms with $1 million or more in sales have nearly half their production under contract. For producers, contracting can reduce income risks of price and production variability, ensure market access, and provide higher returns for differentiated farm products. For processors and other buyers, vertical coordination through contracting is a way to ensure the flow of products and to obtain differentiated products, ensure traceability for health concerns, and guarantee certain methods of production. The traditional spot marketthough it still governs nearly 60 percent of the value of agricultural production-has difficulty providing accurate price signals for products geared to new consumer demands (such as produce raised and certified as organic or identity-preserved crops modified for special attributes). We are likely to see a continuing shift to more explicit forms of vertical coordination, through contracts and processor ownership, as a means to ensure more consistent product quantity and quality.
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