Kumar Bhattarai,

Department of Economics, 

Patan Multiple Campus, 

Tribhuvan University, Nepal

E-mail: bhattarai1000@gmail.com

Consumers’ willingness to pay for organic vegetables: Empirical evidence from Nepal

Abstract. Due to undesirable health effects of conventional agricultural products, consumers are encouraged to prefer organic products. This study analyzes consumers’ willingness to pay for organic vegetables in Kathmandu valley, Nepal, by applying single bounded dichotomous choice contingent valuation method. For this, the sample of 120 respondents was chosen randomly from four vegetable markets of Kathmandu valley. 94% of the respondents were found to be interested for organic vegetables whereas 86%  were willing to pay for the offered bid premium. Majority of the respondents were found not to believe that vegetables available at their markets are really organically grown. The study has found that bid premium, education, household size, consumer perception about the presence of chemical residue in conventional vegetables and experience of suffering from vegetable borne diseases were the factors influencing consumers’ willingness to pay a premium price for organic vegetables. The mean willingness to pay a premium price for organic vegetables was 25%. As there is a market for organic vegetables in Kathmandu valley, there is a necessity for sufficient supply of such vegetables. Organic certification of vegetables by the government or related institutions may help increase consumers’ confidence in organic vegetables.

Received: December, 2018

1st Revision: April, 2019

Accepted: July, 2019

DOI: 10.14254/2071-789X.2019/12-3/9

JEL Classification: D02, O13, O17, P36, Q11

Keywords: bid premium, Kathmandu valley, organic vegetables, single-bounded contingent valuation method, the willingness to pay