Organic and conventional milk purchase behaviors in Central Ohio

Abstract

The authors use weekly milk scanner data from six stores of a national supermarket chain to investigate empirically the purchasing patterns of suburban and inner-city residents for conventional and organic milk. They disaggregate conventional milk products into four categories based on fat content (whole, 2%, 1%, and skim); organic milk is disaggregated into these same categories, but for empirical estimation, some categories are combined. Their descriptive statistics show that suburban consumers, relative to inner-city consumers, purchase more organic and lower-fat conventional milk. These same consumers pay higher prices for conventional and organic milk, save for conventional 1% and skim milk. Our econometric results indicate that suburban consumers are price insensitive toward the purchase of all conventional and organic classes; inner-city consumers are price-sensitive toward conventional whole and 2% milk-products that constitute 89% of their milk expenditure; these same consumers are price insensitive toward all other classes of conventional and organic milk. [JEL codes: Q110, Q130, Q180]. r

The Organic Milk Market in Germany Is Maturing: A Demand System Analysis of Organic and Conventional Fresh Milk Segmented by Consumer Groups

“…Demand for organic milk seems to be even less elastic than demand for conventional milk. This finding is consistent with the work of Chang et al () and Monier et al (), but conflicts with the elasticity estimates of all the other studies.…”

“…The results indicated an elastic demand for both organic and conventional milk. In contrast, Chang, Hooker, Jones, and Sam () showed an inelastic demand for both milk types. They analyzed retail scanner data of six stores in central Ohio comparing suburban and inner city areas.…”

“…Second, demand for organic milk seems to be more elastic than demand for conventional milk. Except for the studies of Monier, Hassan, Nichèle, and Simioni () and Chang et al (), all the studies reported own‐price elasticities that were lower in absolute values for conventional milk than for organic milk. Third, studies that distinguished between brand and private label conventional milk did not find a significant difference in the price elasticities.…”

Identification and characterization of fluid milk consumer groups

“…Furthermore, the basics cluster was characterized by respondents who reported a generally lower income, lower age, and less focus on diet and exercise compared with other groups. The similarities between the value and basics clusters with respect to their conjoint results suggest that demographics may not be an effective determinant of fluid milk purchase for all consumer groups (Zepeda et al, 2003;Chang et al, 2011).…”

What's in a Name? The Impact of Fair Trade Claims on Product Price

“…Although an expanding market would indicate growing demand, one cannot directly link changes in SRP into changes in demand. Thus although sales (scanner) data (e.g., Chang, Hooker, Jones, & Sam, ; Levaggi & Brentari, ; Martinez‐Garmendia, ; Schollenberg, ;) remain the gold standard for hedonic studies at the consumer level, this analysis of SRP is intended to explore manufacturer valuation directly (Carew, Florkowski, & Smith, ) and thereby only provides indirect insight into customer/consumer valuation. But although SRP may not be a perfect substitute for point‐of‐sale data, it not only comes reasonably close to what market price would actually be (assuming producer knowledge of consumer WTP), it also tells us what firms think about their consumer base before observing their actual purchase—an interesting and useful glimpse into the thought process of the firm that has applications from traditional regression analysis to game theory experiments.…”