Paper Number: 2002-03
Document Date: 05/2002
Author(s): Kelly B. Maguire, Nicole Owens, and Nathalie B. Simon
Subject Area(s): Children’s Health; Valuation; Toxic Substances
Keywords: organic foods; hedonic model; willingness to pay; children
Abstract: In this paper we estimate the price premium associated with organic baby food by applying a hedonic model to price and characteristic data for baby food products collected in two cities: Raleigh/Durham, North Carolina and San Jose, California. We use price per jar of baby food as the dependent variable and control for a number of baby food characteristics (e.g., brand, type, and stage) as well as store characteristics (e.g. type of retail establishment). We find the price premium associated with the organic characteristic to be approximately 12 cents per jar. To the extent this premium reflects parents’ preferences regarding the reduction of their baby’s exposure to pesticide residues, our results could be paired up with risk data to estimate the value of the health benefits associated with reduced exposure.
This paper is part of the Environmental Economics Working Paper Series.
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