Will Consumers Pay a Premium for Eco‐labeled Apples?

Abstract

Farmers and other producers are responding to consumer concerns about pesticides by creating new marketing opportunities for products grown with environmentally sound practices. The eco‐label analyzed in this study is certified by The Food Alliance (TFA), a non‐profit third‐party certifying organization based in Portland, Oregon. We assess the mean willingness to pay (WTP) for eco‐labeled apples using a double‐bounded logit model. We conclude that female respondents with children, and strong environmental and food safety concerns are more likely to pay a premium for eco‐labeled apples. However, the estimated premium is small (about 5 cents per pound over an initial price of 99 cents), reflecting the overall difficulty with garnering a premium based on “environmentally sound”practices.