Willingness to pay for organic food in Spain: an approach to the analysis of regional differences

Despite the growing popularity of organic farming in Spain, it faces serious problems in the development of its domestic market. Many consumers consider that organic foods are expensive, although they do not have a real knowledge about them, which deepens even more their perception of overpricing. Through a survey of 361 consumers of the Spanish regions of Extremadura and Murcia, we have studied the levels of knowledge and consumption of organic food. By modeling the Willingness to Pay for the organic attribute with Logit regression models, we have appreciated the importance of the overpricing in the purchase decision. The results have also shown that, although both regions have similar levels of knowledge and consumption of organic food, their willingness to pay for this type of food, as compared to conventional food, varies substantially. The lack of information and knowledge that consumers still have about these foods are very important and overpricing with respect to conventional foods can be considered the most important and ultimate barrier to the development of this market.