U.S. Consumer Demand for Organic Fluid Milk by Fat Content
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This study examined consumer demand for organic fluid milk in the current maturing organic
market using a nationwide weekly retail scanner data set. An Almost Ideal Demand
System in which both organic milk and conventional milk were further decomposed into
products with different fat content was estimated. The demand for organic milk was
shown to be price elastic. The results also revealed substitutions between organic milk
and conventional milk products differing in fat content. The substitution pattern was
asymmetric and there was greater movement toward organic milk than back toward conventional
milk for the same relative change in price.