LAUSR

Abstract Previous studies have established that consumers have a significantly higher willingness to pay (WTP) for organic foods over their conventional counterparts. Not fully understood is how consumers view the importance of the required attributes of organic, how confident they are that the organic label reflects these attributes, and how these two factors interact and influence WTP. This study used non-hypothetical auction experiments to examine these issues with a sample of 128 consumers from the general population. Participants first entered their WTP for conventional and organic versions of four different foods selected in different categories (dairy, meat, vegetable) to cover the different possible organic attributes. They were then asked to rate their importance level in, and confidence of, seven required attributes of USDA organic (e.g. no synthetic pesticides, non-GM). The specific goals were to examine the relationship between importance and confidence ratings, and to determine if confidence ratings can be predicted by importance and how confidence in turn influences WTP. For the former, importance ratings for all organic attributes were found to be significantly higher than corresponding confidence ratings. Results from a simultaneous equation system then showed that higher importance ratings significantly increased confidence ratings, while higher confidence increased marginal WTP for all four organic food products. These findings suggest WTP for organic foods is more complex than typically perceived, with it relying heavily on how important consumers see each attribute and their confidence that they are really getting those attributes with their purchases.