U.S. Demand for Organic and Conventional Fresh Fruits: The Roles of Income and Price

Using retail purchase data reported by Nielsen‘s Homescan panel this study investigates the U.S. demand for organic and conventional fresh fruits. The study fills an important research void by estimating the much needed income and price elasticities for organic and conventional fruits utilizing a censored demand approach. Household income is found to affect organic fruit consumption. Consumers are more responsive to price of organic fruits than to price of conventional fruits. Cross-price effects suggest that a change in relative prices will more likely induce consumers to ―cross-over‖ from buying conventional fruits to buying organic fruits, while it is less likely that organic consumers will ―revert‖ to buying conventional fruits.