Willingness to pay for organic products: Differences between virtue and vice foods

Faced with growing environmental problems, food safety issues, and increasing obesity rates, many consumers desire healthier, less processed natural foods that are less harmful to the environment. Yet organic foods only partially benefit from this market environment, and their market share remains quite low despite high growth rates. The usual explanation for this discrepancy is that consumers are not willing to pay the price premium prompted by an organic claim. In this paper, we explore the reasons behind consumers' (un)willingness to pay for organic food and investigate whether it differs between virtue and vice food categories. The results indicate that in vice food categories, organic claims are associated with lower quality, which seems to be only partly compensated by higher prosocial benefits. The lower-quality perceptions translate into a decreased consumer willingness to pay (WTP). We supplement the empirical results with data on organic purchases in the Dutch food market. These data show that market shares of organic food are indeed lower for vice categories of organic food.

Research highlights
► Organic food is associated with lower quality for vice food categories.
► Negative quality associations are only partly compensated by higher prosocial benefits.
► The lower quality perceptions translate into lower willingness to pay.
► Actual purchasing data reveal that organic food is less popular in vice categories.