Abstract
This article reviews research on consumer behaviour regarding the price of organic food published from January 2000 to December 2013, in order to identify the current state of research and research gaps. The publications were classified into stimulus-response or stimulus-organism-response paradigm based studies. Organism-internal processes were further divided into ‘affective’, ‘cognitive’ and ‘intentional’ processes. Moreover, for a systematic review the categories ‘price elasticity’, ‘price perception and evaluation’, ‘price knowledge’, and ‘willingness-to-pay’ were built. The majority of studies were based on a stimulus-organism-response paradigm. 20 studies in the sample analysed the price elasticity of demand and reported partly contradictory results. There were no studies on affective processes in the sample. A solid body of knowledge exists on the cognitive processes ‘price perception and evaluation’ while very few studies investigate ‘price knowledge’. The majority of studies were concerned with the willingness-to-pay for organic food and yielded mixed and contradictory results. The explanatory power and conclusiveness of research is impaired by weak sampling techniques (e.g., convenience sampling, sampling at few locations) and data collection methods. The improvement of sampling techniques, the increase of comparability of results and the deepening of analyses is recommended.
Generated Summary
This review article, published in Food Quality and Preference, examines consumer behavior related to the price of organic food, focusing on studies published between January 2000 and December 2013. The research employs a theoretical framework that classifies publications based on stimulus-response or stimulus-organism-response paradigms, and further categorizes them into price elasticity, price perception and evaluation, price knowledge, and willingness-to-pay. The methodology involved a comprehensive literature search across eight databases, followed by manual screening and analysis of empirical studies. The review aims to identify the current state of research, highlight research gaps, and assess the impact of price on consumer behavior regarding organic food. The studies were analyzed based on their methodologies, sampling techniques, sample sizes, and the current state of research within each category. The review primarily focuses on the S-O-R paradigm, which emphasizes organism-internal processes. Data collection methods, sampling techniques, and the sizes of the studies vary, affecting the generalizability of the findings.
Key Findings & Statistics
- The review analyzed 194 journal articles.
- The number of publications on the topic increased from 2 in 2000 to 20 in 2013, peaking at 34 in 2011.
- Most studies on consumer behavior regarding the price of organic food took place in Europe (90) and North America (68).
- The studies on price elasticity used various data collection methods, with the majority (12 studies) using household panel data.
- Among the 20 studies on price elasticity, the sample sizes varied, with a minimum of 154 respondents and a maximum of 20,000 respondents.
- The median sample size for price elasticity studies was 2,310.
- Nine studies on price elasticity had sample sizes greater than 999.
- Four studies used retail scanner data, with the number of observations ranging from 104 to 6,750 (median 280).
- The majority of the 38 studies on price perception and evaluation used quantitative methods (28 publications).
- The sample sizes for the quantitative studies on price perception and evaluation ranged from 120 to 13,074, with a median of 416 respondents.
- 15 studies had a sample size between 100 and 499, while 9 studies had a sample size larger than 999.
- The qualitative studies used focus groups (8), in-depth interviews (3), and guided interviews (3).
- The sample sizes of the qualitative studies ranged between 7 and 181, with a median of 23.
- Of the 146 studies on willingness to pay (WTP), 144 applied a quantitative approach and 17 a qualitative approach.
- 68 studies on WTP used face-to-face interviews, 43 used choice experiments, and 41 used contingent valuation.
- The sample sizes of the WTP studies ranged from 30 to 14,436 respondents, with a median of 384.
- 82 studies had a sample size between 100 and 499, 19 between 500 and 999, and 31 more than 999.
- The average WTP for organic fruit and vegetables in the USA increased by 42% from 2001 to 2004.
Other Important Findings
- Most studies on price elasticity reported mixed results, even within product groups.
- Studies on price perception and evaluation frequently reported price as a major barrier to purchasing organic food.
- Studies on the WTP for organic food showed that the WTP differed by product categories and consumer segments.
- The price elasticity of demand for organic milk varied across studies; some found it to be low, while others found it to be great.
- Cross-price elasticities between organic and conventional milk were higher for organic milk.
- Consumers of organic fruit and vegetables were relatively reluctant to switch to conventional options.
- The buying intention wasn’t negatively affected by the price perception.
- In the Netherlands, even if prices for organic food were lowered to the level of conventional products, this did not lead to significantly higher sales.
- Consumers in general have a positive attitude toward organic food.
- The main factor leading to low price knowledge was the information cost.
- Studies found that the labeling of products increases the WTP.
Limitations Noted in the Document
- The review may not have identified all relevant studies due to accessibility limitations.
- Deep analysis was limited by the large number of studies.
- The study assumes a very large number of relevant studies was identified. However, due to a lack of accessibility, not all articles identified as relevant for the study could be analyzed. The number of studies that could not be accessed, even after direct requests were made to the authors, was six of the total 200 studies identified.
- The price elasticity studies’ conclusions may be limited, as they do not necessarily measure individual consumer responses at the point of sale.
- The sampling techniques, particularly the use of convenience sampling, may affect the generalizability of the results.
- In some instances, explanatory power of studies might be decreased due to a small sample size.
- Sampling was often limited to one or two cities, which may not represent entire countries due to regional differences.
Conclusion
The review highlights that research on the impact of price on consumer behavior regarding organic food is extensive but presents mixed results, especially concerning price elasticity. The studies predominantly use the S-O-R paradigm, focusing on internal consumer processes. A significant finding is the frequent reporting of price as a major barrier to the purchase of organic food. However, this must be viewed with caution, as the organic market continues to grow, indicating that other factors, such as increasing environmental awareness, also play a significant role. The study emphasizes that research should pay special attention to the price behavior of frequent buyers. The study underscores the need for improved sampling techniques to increase the quality of conclusions. The mixed results in price elasticity and WTP studies indicate a need for further investigation. To increase the quality of conclusions, the comparability of studies needs improvement. Key takeaways from the review include: The price sensitivity of consumers varies significantly, and price knowledge is often low. The WTP for organic food is influenced by various factors, including product categories, consumer segments, and labeling. The study also reveals a significant gap in research regarding affective processes, which can affect consumer behavior. The review recommends the improvement of sampling techniques, increased comparability of results, and a deeper analysis of factors influencing consumer behavior towards organic food. Future research should focus on testing actual consumer behavior and understanding consumer price knowledge to develop effective pricing strategies. The review suggests that a stronger focus on suitable sampling techniques is needed to increase the explanatory power of research. The existing findings indicate that general consumer price knowledge is rather low. To increase the quality of conclusions that can be drawn from the existing state of the art, the comparability of studies should be improved.