Price promotion of organic foods and consumer demand

Chen, Danhong, Jaenicke, Edward C., Yan, Ji, Tian, Kun and Nayga, Rodolfo (2021) Price promotion of organic foods and consumer demand. Renewable Agriculture and Food Systems. ISSN 1742-1713

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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.

Item Type: Article
Uncontrolled Keywords: demand elasticity,organic vices,organic virtues,food science,agronomy and crop science ,/dk/atira/pure/subjectarea/asjc/1100/1106
Faculty \ School: Faculty of Social Sciences > Norwich Business School
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Depositing User: LivePure Connector
Date Deposited: 13 Jan 2022 15:30
Last Modified: 10 May 2022 00:39
URI: https://ueaeprints.uea.ac.uk/id/eprint/83018
DOI: 10.1017/S1742170521000399

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