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2006

Iowa State University

CARD Working Papers

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Discounting Spotted Apples: Investigating Consumers' Willingness To Accept Cosmetic Damage In An Organic Product, Chengyan Yue, Frode Alfnes, Helen H. Jensen Nov 2006

Discounting Spotted Apples: Investigating Consumers' Willingness To Accept Cosmetic Damage In An Organic Product, Chengyan Yue, Frode Alfnes, Helen H. Jensen

CARD Working Papers

Organic producers have limited methods of avoiding plant diseases that result in cosmetic damage to produce. Therefore, the appearance of organic produce is often less than perfect. We use an experimental auction to investigate how cosmetic damage affects consumers’ willingness to pay for organic apples. We find that 75% of the participants are willing to pay more for organic than for conventional apples given identical appearance. However, at the first sight of any imperfection in the appearance of the organic apples, this segment is significantly reduced. Furthermore, we find that there is a significant effect of interaction between cosmetic damage ...