The Environmental Benefits of Organic Wine: Exploring Consumer Willingness-to-Pay Premiums?

Abstract

Consumers and the producers have shown interest in organics, but there exist gaps in their common interest. Producers require premiums for their products based on the peculiarity of their pro- duction circumstances and the perceived benefits inherent in their products. Predicting consumer willingness to pay a premium for the environmental benefits of organics (WTPe) is a challenge and is of interest in this study. The contingent valuation method was used to gather information on WTPe from a sample that yielded 2,099 surveys. The econometric test ordered probit regression and other analyses were carried out. On average, respondents indicated WTP 23% premium. The proposed hypotheses were tested, and all were accepted except social demographic variables that presented a mixed outcome. The results have implications for consumer sensitization and enlightenment programs of the wine indus- try, wine market segmentation, and government’s climate change policy. This study is exploratory and has presented a snapshot sce- nario. Confirmatory and longitudinal studies are recommended to validate this study’s outcomes.