The Survey of Heterogeneity on Organic Products Consumers’ Preferences Using Mixed Logit and Latent Class Models

Abstract

Today, the importance of consumption of organic products has become more evident to the consumer due to the great benefits of these products. The aim of this study is to investigate the factors affecting the preferences of organic tea consumers in Tehran by considering the heterogeneity of consumer’s preferences. For this purpose, mixed logit and latent class model were used. The required information were collected through field surveys by completing a questionnaire from 405 respondents from Tehran citizens in 2016. Results from estimating mixed logit and latent class models confirm the heterogeneity of preferences between consumers. Different levels of income, education, age, history of poisoning and awareness of organic products were identified as heterogeneous factors. The results of the estimation models showed the maximum willingness-to-pay is related to the attribute of the disease and long-term effects. According to the findings of the study, it is suggested to help increase people's awareness of the characteristics of organic products and the use of targeted-oriented strategies to encourage consumers to consume organic products.

Keywords:

• Choice experiment
• Lancaster value theory
• stated preference
• willingness-to-pay

JEL CLASSIFICATION:

• D01
• D11
• D12