Consumers see a lot of value in organic foods and new research has found that those shoppers are willing to pay a great deal more for that value.
Overall, researchers found that people were willing to pay up to 23.4 percent more for organic foods than they were for the same products not labeled organic. Consumers are willing to pay more for organic foods because of the so-called "health-halo effect," researchers say.
That effect, where consumers overvalue the benefits of organic foods, was shown in research by Cornell University’s Food and Brand Lab researchers Wan-chen Jenny Lee, Mitsuru Shimizu, Kevin Kniffin and Brian Wansink. In that research, 115 people were recruited from a shopping mall in Ithaca, N.Y.
Each of those shoppers was then asked to evaluate three pairs of products. The catch was that one of those products was labeled organic while the other was not. However, both pairs of yogurt, cookies and potato chips used in the study were identical. Consumers were not able to make the distinction between the products and rated organically labeled food lower in fat, more nutritious, more appetizing and more flavorful. The only difference came when consumers rated cookies not labeled organic as tasting better.
Those attitudes go a long way in explaining why consumers are willing to pay more for organic products than others, researchers say.
"The study found that people tend to assume that organic foods are good for everything (e.g., low calorie, more fiber), so they tend to pay more for organic foods," said Shimizu, a postdoctoral research associate at the Dyson School of Applied Economics and Management at Cornell. "This effect is stronger among those who rarely buy organic foods or those who do not pay attention to the nutrition labels."
However, consumers should take a slightly cautious view of organic foods, Shimizu says. That's because the researchers say that the health-halo effect can significantly bias consumers in their purchases of organic foods.
"Thus, consumers, especially those types of consumers, need to be careful — they should pay more attention to the nutrition label of organic foods," Shimizu said. "Organic foods are not necessarily as good and worthy as they think."