Exploring the role of transaction costs in the intensity of organic food consumption in Brazil

Abstract

PurposeOrganic food has additional quality attributes compared to those found in conventional food, such as environmental responsibility and health benefits. Information about these attributes is scarce and complex, the assortment of organic foods is deficient and there are fewer places that sell this kind of food. These factors increase the uncertainty and the transaction costs (TCs) for potential organic fresh fruit and vegetable (FFV) consumers. This paper aims to show the influence of these costs on the intensity of organic FFV consumption, particularly among high-income consumers.Design/methodology/approachThe empirical strategy was based on a survey, and data were collected by administering a structured online questionnaire among residents of the Brazilian Federal District. Organic food consumption was decomposed into three different intensity categories. Data analysis was based on two logistic models, a multinomial regression and an ordered regression, where perceived economic value and different dimensions of TCs were the main independent variables, and the intensity of organic food consumption was the dependent variable.FindingsThe results show that organic food consumers are not a homogeneous group, and that perceived economic value and the TCs associated with searching for marketplaces, inadequate product assortment and distrust in health benefits and in organic authenticity are important inhibitors of organic FFV consumption and help explain the intensity of consumption.Originality/valueThis study innovates, as it takes a post-purchase approach, examines different groups based on the intensity of their consumption of organic FFV and focuses on perceived economic value and TCs as important explanations of the intensity of organic FFV consumption.