An analysis of readiness to pay for Organic Food Products using Structural Equation Modeling

Abstract

This study has made an effort to understand the elements that encourage the buyersto spend extra money for organically grown food products among the families living in Delhi. The researcher has made use of a questionnaire in structured form to conduct a survey with 166 respondentsto know their readiness to spend money for buying organically grown food products. The data collected were tested using statistical technique to know the elements that encourage buyers willingness to purchase organically produced food items. The result of the study confirms that the main motives behind buying organically grown products are ecological concerns and perceived expensiveness. Nevertheless, limited availability, labelling and certification are thought to be insignificant to influencing willing to pay for the organic food. Researcher finds the evidence that the buyers primary motivation and requirement to form suitable market policies and schemes to improve the forecasted demand. Additionally, the paper also recommends that though the consumption of organically grown products is growing, still a long way to go for organic food to get acknowledged as a mainstream stream food. The aim behind conducting the present research was to discover the elements that drive organic product buyers readiness to spend for the food products.

 Keywords: Readiness to Pay Organic Products, Environment Consciousness, Perceived Expensiveness, Limited Availability, Labeling and Certification.