The Willingness to Pay for Organic Milk by Consumers in Tehran

Abstract

This study determines the consumers’ willingness to pay for organic milk in Tehran by using Contingent Valuation Method and Single Bounde d Dichotomous Choice questionnaire. Logit regression model was used to e valuate the effect of explanatory variables on willingness to pay and the model param eters were estimated by using maximum likelihood approach. For this purpose, 450 questionnaires were completed in the city by respondents who had independent income in 2012. Shazam, SPSS, and Maple softwares were used to obtain the results. Accordin g to the results, variables such as income, family’s illness history, age, educational level, distance to the shopping center, apprising respondents, organic milk quality, and th e offered price had a significant effect on consumers' willingness to pay for organic milk. Overall, 80.3% of the respondents were willing to buy organic milk. The average of co nsumers' willingness to pay was estimated at 28,600 Rials per liter of organic milk . The results showed this product to be important for people; and this point can help produ cers, planners, and managers for further development of this product. Keywords : Contingent valuation method, Logit model, Milk co nsumption , Single bounded dichotomous choice