Applied Economics & Business

ABSTRACT

Organically grown vegetables are more beneficial due to prevailing health issues and environmental matters of non organic farming. Organic farming sustains the health of people, ecosystems, and soils. The objectives of this research are to find the: consumers’ perception on organic vegetables, consumers’ willingness to pay for organic vegetables over non-organic vegetables, and the effects of socio-demographic characteristics on willingness to pay for organic vegetables in the case of Gampaha District in Sri Lanka. A questionnaire survey was conducted at the household level with randomly selected 260 respondents covering randomly selected four divisional secretariats in the Gampaha district. Data were analyzed using the contingent valuation method in R statistical software. Results revealed that 100 percent of consumers are willing to buy organic vegetables instead of non-organic vegetables at the same bid price. Seventy percent of consumers agreed to pay an additional amount for organic vegetables over non-organic vegetables. Demographic variables i.e. monthly income and education level significantly influence willingness to pay for organic vegetables. Perception factors i.e. organic vegetables are healthier, certified organic vegetables are real organic, and organic vegetables are more nutritious, significantly influence willingness to pay for organic vegetables. Through these findings, organic farmers can get an idea about premium price levels that can be assigned to organic vegetables. Policymakers can get an awareness of consumers’ willingness to pay and the cross-price effects that refers to organic and nonorganic vegetables.

KEYWORDS: Consumer perception, Contingent valuation, Organic vegetables, Willingness to pay