The Willingness to Pay for Organic Milk by Consumers in Tehran

Authors
H. Amirnejad
P. Tonakbar
Department of Agricultural Economics, Sari University of Agricultural Sciences and Natural Resource, Sari, Islamic Republic of Iran.
Abstract
This study determines the consumers’ willingness to pay for organic milk in Tehran by using Contingent Valuation Method and Single Bounded Dichotomous Choice questionnaire. Logit regression model was used to evaluate the effect of explanatory variables on willingness to pay and the model parameters were estimated by using maximum likelihood approach. For this purpose, 450 questionnaires were completed in the city by respondents who had independent income in 2012. Shazam, SPSS, and Maple softwares were used to obtain the results. According to the results, variables such as income, family’s illness history, age, educational level, distance to the shopping center, apprising respondents, organic milk quality, and the offered price had a significant effect on consumers' willingness to pay for organic milk. Overall, 80.3% of the respondents were willing to buy organic milk. The average of consumers' willingness to pay was estimated at 28,600 Rials per liter of organic milk. The results showed this product to be important for people; and this point can help producers, planners, and managers for further development of this product.

Keywords

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Journal of Agricultural Science and Technology
Volume 17, Issue 7
November and December 2015
Pages 1685-1694