Willingness-to-pay for organic food products and organic purity: experimental evidence
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The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).
History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.
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1898–present
Historical Names
- Department of Economic Science (1898–1910)
- Department of Economics and Political Science (1910-1913)
- Department of Applied Economics and Social Science (1913–1924)
- Department of Economics, History and Sociology (1924–1931)
- Department of Economics and Sociology (1931–1967)
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- College of Agricultural and Life Sciences (parent college)
- College of Liberal Arts and Sciences (parent college)
- College of Business (parent college)
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Abstract
The market for organic products has been growing rapidly over the past decade, and is now available not only in specialty stores like Whole Foods but also in Hy-Vee and other large grocery stores and super markets. Even Wal-Mart and Target carry organic produce and dairy products. This paper uses information collected in laboratory experiments to test the hypothesis that some consumers are willing-to-pay more for organic than conventional food and that they will pay more for organic food with higher degrees of organic purity. The participants in the experiments are from the Ames, IA area. The experimental products are organic and conventional coffee, maple syrup and olive oil. We found that participants were willing to pay higher prices for an organic product with high levels of organic purity. Also, individuals with more education were willing to pay more for organic relative to conventional products and addition household income (per capita basis) increases willingness-to-pay for organic products up to $76,100, and willingness-to-pay decreased as per capita household income increased above $76,100.