Preferences and willingness to pay for organic milk among urban consumers in Dalian, China

Abstract

This paper aims to assess the preferences and willingness-tc-pay for organic milk attributes among Chinese consumers. A discrete choice experiment was used to elicit preferences for organic milk attributes from 181 consumers regarding the importance of five organic milk attributes: organic feeding, animal welfare concerns, chemical-concerns, certification and price. The random parameters logit (RPL) model was used to determine preference heterogeneity among respondents. The derived coefficients of the RPL model was used to estimate the implicit price of the milk attribute, and the respondent's willingness to pay for combined features of milk attributes. The willingness to pay for combined features of milk attributes was estimated at 3.190 Yuan per 250 ml of milk. Respondents preferred milk that comes from organically-fed cattle, with certification label and with a lower price. Respondents' preferences for animal welfare attribute exhibited age and education specific differences. The negative effect of price on consumers' preferences can be offset by targeting older, highly-educated and male consumers and by increasing consumer awareness about organic milk.