Organic and Conventional Food: A Literature Review of the Economics
of Consumer Perceptions and Preferences
Samuel Bonti-Ankomah1 and
Emmanuel K Yiridoe2
RESEARCH QUESTION AND OBJECTIVES
Growing interest in organic agriculture has prompted numerous studies
that compare various aspects of organic and conventionally-produced foods.
This report provides a comprehensive evaluation of empirical studies comparing
organic products and conventionally grown alternatives. The emphasis is
on key organic consumer demand and marketing issues, including: (1) the
implications of an economic definition of organically grown food for consumer
demand; (2) attributes that shoppers consider most when comparing organic
with conventionally grown products; (3) level and characteristics of consumer
knowledge and awareness about organic food; (4) assessment methods and
characteristics of organic consumer attitudes and preferences; (5) size
of price premium and characteristics of consumers' willingness-to-pay
for organic products; and (6) profile of organic consumers.
How knowledgeable and informed are consumers about organic products?
Overall, although there is some knowledge and awareness about organic
products, consumers are not consistent in their interpretation of what
is organic. Second, while consumers typically understand the broad issues
about organic foods, many tend not to understand the complexities and
niceties of organic farming practices and organic food quality attributes.
Uncertainty regarding the true attributes of organic, and skepticism about
organic labels, part of which stem from reported cases of (inadvertent)
mislabeling, and product misrepresentation, and partly because of nonuniform
organic standards and certification procedures, may hold some consumers
back from purchasing organic.
What is the single most important factor that drives demand for organic
products? Concern for human health and safety, which is a key factor that
influences consumer preference for organic food, is consistent with observed
deterioration in human health over time and, therefore, motivates consumers
to buy organic food as insurance and/or investment in health.
What are the key economic issues and considerations that affect organic
product purchase? The proportion of consumers who are willing to pay a
price premium for organic food decreases with premium level. On the other
hand, premiums tend to increase with (combinations of) preferred attributes.
In addition, demand tends to depend more on the price differential with
respect to conventionally grown products, than on actual price. In contrast
to sensitivity of demand to changes in price, income elasticity of demand
for organic foods is generally small.
Issues of relevance to policy analysts: It is important for policy analyst
and researchers to note that organic fresh fruits and vegetables currently
dominate the organic consumers' food basket. Furthermore, it is not clear
whether frequent buyers consider particular organic products (e.g. organic
meat) as normal goods, or if consumers consider such products as luxury
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The reference for a related academic paper is "Yiridoe, E.K., Bonti-Ankomah,
S. and Martin, R.C. 2005. Comparison of consumer perceptions and preference
toward organic versus conventionally produced foods: A review and update
of the literature. Renewable Agriculture and Food Systems. 20(4): 193-205"
Author Locations and Affiliations
(1) Research Economist, Agri-Food Chain and Integrated
Risk Management Analysis, Agriculture and Agri-Food Canada, Ottawa, Canada
(2) Associate Professor, Department of Business
and Social Sciences, Nova Scotia Agricultural College, Truro, Nova Scotia,
B2N 5E3, Canada;
Corresponding author: email@example.com;
Phone: 902-893-6699, Fax: 902-897-0038
Please note: Agriculture and Agri-Food Canada (AAFC) is pleased to participate
in the production of this OACC information. AAFC is committed to working
with our industry partners to increase public awareness of the importance
of the agriculture and agri-food industry to Canada. Opinions expressed
in this document are those of OACC and not necessarily of AAFC.