Analyzing demand and consumers' willingness to pay for organic fruits and vegetables

Consumers' awareness, trust, and willingness to pay (WTP) for organic food products have evolved in stages starting from US (1960s), then Europe (1980s) and finally all around the world. Organic products are believed to be healthier than the conventional products by most of the consumers. This belief has been more significant in recent years in demand for organic foods; and in particular organically produced fruits and vegetables. The world organic market increased to 59 billion US$ in 2010 and the top-selling organic products since 1997 have been organic fruits and vegetables. In order to develop and sustain the markets for organic products in UAE, understanding of the factors motivating the consumers to buy such products becomes essential. Since the unit price of organic products is higher than the conventional products, consumers may believe that the price premium is worthwhile. The main objective of this study was to analyze demand, elicit UAE consumers' awareness, and their WTP for organic fruits and vegetables. Five hundred respondents were surveyed and 291of them were willing to pay more than current conventional product prices for organic fruits and vegetables. Tobit and the Generalized Double Hurdle Cragg's models were used to determine the factors affecting the consumers' WTP for organic products. According to the results, respondents from Al Ain city and those with higher education seem to be less willing to pay a premium for organic products. However, consumers from Sharjah are willing to spend more on organic fruits and vegetables each week as well as consumers with knowledge and positive attitude regarding organic foods.