The majority of studies on consumer demand for organic products neglect the presence of non-organic competitors, ignoring their effect on consumer demand for organics. This article uses a demand system which includes both organic and non-organic fruits and vegetables, with actual (as opposed to stated) data for household purchases. Estimation of our model provides empirical evidence on the interrelationships between organic and non-organic products, as the relevant cross-price elasticities. Own-price elasticities indicate that organic fruits and vegetables are more price elastic than their non-organic counterparts, and that lower social class households with children have the most own-price elastic demand. Cross-price elasticities indicate relatively strong loyalty to organic products.
- organic fruit and vegetables
- Almost Ideal and censored demand systems
- British households