Analyzing Determinants of Consumer's Willingness to Pay a Premium for Pesticide-free Fruit and Vegetables in Marand City

The aim of this study is to investigate factors affecting consumer's willingness to pay premium prices for the pesticide-free fruit and vegetables in Marand city. A Contingent valuation survey of 394 respondents was conducted in 2010. An Ordered Logit regression model was applied to determine factors effecting consumer's willingness to pay for pesticide-free fruit and vegetables. The survey results present that only 3 percent of the respondents would not be willing to pay a premium; while about 64 percent would be willing to pay a premium between 5 and 20 percent and about 33 percent would be willing to pay more than 20 percent premium for pesticide-free fruit and vegetables. Results reveal that factors such as individual's income, environmental and health concerns, the level of safe shopping criteria, consumer's knowledge of pesticide free fruit and vegetable's characteristics and consumer's knowledge of pesticide's side effects increase the willingness to pay a premium for pesticide-free fruit and vegetables, significantly. In addition, those who have seniors in their family would be willing to pay a significant high premium price for these products. More than 50 percent of the consumers mentioned "the nonexistence of certifications and labels", "lack of supply" as problems of purchasing pesticidefree fruit and vegetables. While 26 percent claimed high prices of these products as their most important problems in their purchasing process of pesticide-free fruit and vegetables. The study recommends encouraging farmers to produce these products, effective advertising and improving consumers’ awareness.