The Demand for Organic Food in the U.S.: An Empirical Assessment
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This analysis examines the determinants of organic food purchase behavior of a random sample of U.S. food shoppers. We analyze food expenditures conditional upon whether a household purchases organic foods. The results from our econometric modeling effort identify shopping venue, awareness of the organic label, positive beliefs toward organic foods, a positive attitude toward cooking, and a lack of religious affiliation as being important determinants of organic food purchases. Income was not found to significantly affect the decision to buy organic foods. Our results suggest that the limiting factors of the organic food market are search cost, dietary patterns, and awareness of the organic food label. Given the recent “Wal-Mart” effect on the organic food market, it is anticipated that these search costs will decrease as organic foods become more widely available.