The effect of information on consumers' willingness to pay for natural and organic chicken

This study examined the effect of definitions for organic and natural on willingness to pay a premium for organic over natural chicken. Data were collected using surveys and experimental auctions that were conducted before and after information was presented. Before information, approximately two-thirds of participants inaccurately equated the requirements of natural with those for organic. After information, nearly 50% increased their premium, while 30% decreased their premium. Logistic regression results showed that consumers who had overestimated the requirements for natural were most likely to have an increased premium after information, with significantly higher bids for organic. For those who decreased their premium after information, awareness of consuming genetically modified (GM) foods was a key variable. The non-genetically modified (non-GM) requirement of organic appears to be of low value to some consumers. Overall, consumer confusion regarding organic and natural standards may be having substantial impacts on the two markets.