![]() The research results and conclusions from papers on overall organic food may not be generalizable to organic food for babies and young children, hence the focus of our study on price premiums in the baby food sector using a recent and large scale nationally representative dataset. However, consumers may be more concerned about pesticide residues if the food is for children given their important stage of growth and high food-to-body weight ratio (Maguire et al., 2006). As mentioned above, several studies have found positive premiums from general organic food categories (e.g., Chang et al., 2010 Jaenicke & Carlson, 2015 Loke et al., 2015 Zhang et al., 2011). ![]() Studying the magnitude is important to evaluate the effectiveness of such incentives. The organic premiums give producers market-based incentives to obtain or maintain organic certification for their products. The empirical literature has documented positive organic price premiums ranging from 7% to 60% for fresh produce (Carlson & Jaenicke, 2016 Zhang et al., 2011), 82%−85% for eggs (Carlson & Jaenicke, 2016 Chang et al., 2010), 34.8%−103.5% for chicken breast (Van Loo et al., 2011), to more than 150% for milk (Chang et al., 2011). ![]() Studies have found evidence that higher prices are one of the major concerns for consumers when buying organic food (Hill & Lynchehaun, 2002 Zepeda et al., 2006). In addition to increased availability of organic baby food products in stores, many other factors also play a role in affecting the development of this market one important factor is the price premium. Per the Nielsen consumer panel data, the number of varieties of organic baby food sold in the market increased from 120 in 2008 to more than 180 in 2016. Organic baby food has benefitted from the growth of the organic food market over the past years. The empirical results show that parents pay 17%–27% more, on average, for organic baby food than conventional alternatives, after controlling for a series of product and market characteristics. ![]() We apply the hedonic price model to Nielsen consumer panel data to isolate brand effects from the organic effects on product prices. The purpose of this paper is to estimate the price premium that parents are willing to pay for organic baby food and how it varies along several dimensions: organic label, food type based on developmental stage, retail channel, frequency of purchase of organic products, and over time. On the other hand, organic baby food is generally more expensive than nonorganic alternatives due to the cost of organic certification. The processing of organic baby food involves minimal use of toxic chemicals and synthetic food additives which may be attractive to health-conscious parents. Parents may be more attentive to health and safety concerns when purchasing food for their babies due to the fragility of the digestive system of infants and their early stage of growth. ![]()
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