Organic and conventional milk purchase behaviors in Central Ohio

Abstract

The authors use weekly milk scanner data from six stores of a national supermarket chain to investigate empirically the purchasing patterns of suburban and inner-city residents for conventional and organic milk. They disaggregate conventional milk products into four categories based on fat content (whole, 2%, 1%, and skim); organic milk is disaggregated into these same categories, but for empirical estimation, some categories are combined. Their descriptive statistics show that suburban consumers, relative to inner-city consumers, purchase more organic and lower-fat conventional milk. These same consumers pay higher prices for conventional and organic milk, save for conventional 1% and skim milk. Our econometric results indicate that suburban consumers are price insensitive toward the purchase of all conventional and organic classes; inner-city consumers are price-sensitive toward conventional whole and 2% milk—products that constitute 89% of their milk expenditure; these same consumers are price insensitive toward all other classes of conventional and organic milk. [JEL codes: Q110, Q130, Q180]. © 2010 Wiley Periodicals, Inc.