Consumer Preference of Organic Vegetables in the Coimbatore City of Tamil Nadu: An Application of Logistic Regression Model

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1 3886 Trends n Boscences 7(23): , 2014 Trends n Boscences 7 (23), 2014 Consumer Preference of Organc Vegetables n the Combatore Cty of Taml Nadu: An Applcaton of Logstc Regresson Model K.S. SHANMUGAPRIYA, S. MURALI GOPAL AND B. SWAMINATHAN Dept. of Agrl. Economcs, Taml Nadu Agrcultural Unversty, Combatore - 3, Taml Nadu, Inda. ABSTRACT The organc food ndustry n Inda remans export orented. Though the producton s growng rapdly, yet the domestc market stll remans relatvely small. The nformaton on consumer preferences for organcally grown fresh vegetables could be expected to provde perspectves on ncreasng organc domestc consumpton. Thereby, an attempt has been made to nvestgate the factors nfluencng the consumer preference to purchase organc vegetables n the Combatore cty n Taml Nadu. Results ndcated that consumers wth hgh ncome, hgher educaton and relatvely older n age prefer to purchase organc vegetables. Logstc regresson analyss revealed that age; educaton; health awareness levels; and ncome of the consumers along wth prce of the produce; dstance of the market and avalablty of the produce are mportant factors n the consumer preference of organc vegetables. Garrett s rankng technque was employed to explore the constrants perceved n the purchase decson of the organc produce. Prce of the produce was perceved as the major constrant followed by nadequate avalablty and lack of nformaton. Key words Consumer Preference, Logstc regresson, Garrett s rankng, Combatore, Inda Interest n organcally produced food s ncreasng throughout the world n response to concerns about conventonal agrcultural practces, food safety and human health concerns (Gregory, 2000), anmal welfare consderatons (Harper, and Makatoun, 2002) and concern about the envronment (Wandel, and Bugge, 1997). These concerns, along wth observed organc consumer behavor has led, n part, to emergence of varous groups of organc consumers, namely envronmentalsts, food phobcs, healthy eaters, humansts, welfare enthusasts, and hedonsts (Daves, et al., 1995). The future of organc agrculture wll, to a large extent, depend on consumer demand. Thus, a consumer-orented approach to understand organc agrculture s mportant. It could be argued that a human concepton of consumer decson makng and behavor towards organcally grown products s consstent wth Lancaster, 1996 noton that consumers demand the characterstcs nherent n such products. The qualty characterstcs of organc produce consttute nto consumers demand for mproved health and overall well-beng. Consumer preference for organcally grown vegetables s based on a percepton that organc has more desrable characterstcs such as human health, food safety and envronmental stewardshp, taste and nutrtve value. Although there s some knowledge and awareness about organc products, consumers are not consstent n ther nterpretaton of what s organc. The most common defntons of an organcally produced food emphasze the technology or producton practces and prncples used, and/or the organc phlosophy (Bourn, and Prescott, 2002). Thus, whle some defntons hghlght dmensons such as bologcal or natural producton systems (Klosky, and Tourte, 1998) and green or envronment frendly (Goldman, and Hylton, 1972), others emphasze the lmted use of artfcal chemcals n organc producton (FAO, 1999), or ts general phlosophy (Torjusen, et al., 1999). Consumers typcally understand the broad ssues about organc foods, many tend not to understand the complextes and ncetes of organc farmng practces and organc food qualty attrbutes. Concern for human health and safety (Bourn, and Prescott, 2002), whch s a key factor that nfluences consumer preference for organc food, s consstent wth observed deteroraton n human health over tme and, therefore, motvates consumers to buy organc food as nsurance or nvestment n health. The decson to adopt a strategy depends on a varety of factors (Calatrawa-leyva, et al., 2005), socoeconomc characterstcs of the consumer and other factors. There are several factors whch affects the awareness level on organc foods among the consumers. It has been emprcally nvestgated that socodemographc profles, food buyng behavour and nutrtonal knowledge of the consumers are most lkely to affect the awareness level and purchase decsons of organc foods (Brz, and Ward, 2009). Consumers wth hgh ncome often buy organc food to reflect on ther awareness and status (Graca, and Magstrs, 2007). (Bhaskaran, and Hardley, 2002) hypotheszed that older consumers (.e., more than 55 years) tend to make

2 SHANMUGAPRIYA, et al., Consumer Preference of Organc Vegetables n the Combatore Cty of Taml Nadu 3887 preventve health decsons, partly because of health vulnerablty and an awareness that they are generally at hgher health rsk than younger ndvduals. However, n some of the studes age factor does not seem to play an mportant role. Few studes have resulted that younger are more aware of organc food and seemng slghtly more wllng to pay for purchase the same (Stevens, and Garmon, 2007). Educaton s descrbed by varous researches as an mportant factor of awareness and purchase motve of organc food (Idda, et al., 2008). Consumers wth hgher educaton are more lkely to buy organc food products (Graca, and Magstrs, 2007). Gender and sze of famly are also crtcal to awareness and purchase of organc food. It s women who buy organc food n larger quantty and more frequently than men (Arvantoyanns, and Krystalls, 2004). Households wth smaller famly sze are found to more aware of organc food and showng atttude of wllngness to pay for organc purchase (Idda, et al., 2008). Presence of chldren n famly postvely nfluences the organc food purchase (Solar, and Sanchez, 2002). (O Donovan, and McCarthy, 2002) reported product avalablty and prce as key nhbtors to consumers demand for organc foods n Ireland. By comparson, they also reported that among Irsh respondents who dd not purchase organc food, 43 per cent ndcated t was too expensve, 28 per cent cted lack of avalablty, whle 29 per cent were just not nterested. Accordng to (Davs, et al.,1995), twothrds of non-buyers of organc food n Ireland reported they would buy organc f t was easly avalable. Further, majorty of such researches were carred out n developed countres, and hence the consumer awareness and preferences for organc food n developng world s mostly unknown. Therefore, there s an urgent need to nvestgate the demand status of organc food partcularly n developng countres such as Inda. As consumer knowledge and awareness s an mportant drve for the growth n the organc food market, therefore an nvestgaton of consumers atttude and behavour towards organc food may help both consumers of organc nterest and marketers of organc food. It may also help government to desgn strateges for consumer educaton on the benefts of gong organc. The present study ams at analysng the factors affectng preference level of consumers on organc vegetables, usng a structured survey of 60 respondents from 6 outlets of Combatore cty. As awareness, knowledge and preference on varous attrbutes of organc foods s fundamental for creatng market demand for organcally grown products, ths study explores the level of understandng among the consumers on dfferent aspects of organc foods. Further, the study also ndentfy the most lkely socodemographc, food safety and consumer nformaton factors affectng the preference level usng a logstc regresson model. The study was to help defne the applcablty, equtablty and enforceablty of consumer preference wth the followng objectve: () to dentfy the factors that affect the consumer preference and consumpton of organc vegetables, and () to dentfy the constrants faced by the respondents n purchase of organc vegetables. MATERIALS AND METHODS The entre study was based on the data collected from the organc consumer s of Combatore cty where approxmately 20 organc outlets are present. Among these outlets 6 outlets were randomly selected. Among the regular customers of these outlets 10 consumers per outlet consttutng a sample sze of 60 respondents were selected. The selected consumers were ntervewed and the nformaton related to the study was collected wth the help of pre-tested well structured ntervew schedule to understand ther preferences towards organc vegetables by personal ntervew method. The collected data were subjected to percentage analyss, logstc regresson analyss, Garrett s rankng technque to draw meanngful nferences to justfy the mportance of organc vegetables for food safety, human health and envronment. Analytcal Tools Percentages were worked out to study the agewse, educaton-wse and ncome-wse dstrbuton of the organc consumers. Apart from ths, the econometrc tools lke Logstc regresson and Garrett s Rankng Technque have also been employed n ths study as gven below, Logstc Regresson Analyss Ths study recognzed the nfluence of varous attrbutes ncludng that of personal and socal attrbutes of the consumer, the dstance between organc outlet, prce of organc vegetables, consumers health, ncome of the consumer and avalablty of organc vegetables on consumers decson to prefer organc vegetables or otherwse. The factors nfluencng the decson were analyzed usng Logstc regresson model. The use of the logt model s consstent wth the lterature on adopton (Alson et al., 1995) whch descrbed the

3 3888 Trends n Boscences 7 (23), 2014 Fg. 1. Top left: Poltcal map of Inda showng the state of Taml Nadu and the locaton of Combatore dstrct. Top Rght: State map of Taml Nadu showng Combatore dstrct. Bottom: Study locatons n the urban areas of Combatore Cty, Taml Nadu.

4 SHANMUGAPRIYA, et al., Consumer Preference of Organc Vegetables n the Combatore Cty of Taml Nadu 3889 adopton process as takng on a logstc nature. The Logt model have also been appled n several adopton studes (Kato, 2000). (Hosmer, and Lemeshew, 1989) ponted out that the logstc dstrbuton (logt) has advantage over the others n the analyss of dchotomous outcome varable. It s extremely flexble and easly used model from mathematcal pont of vew and results n a meanngful nterpretaton. The bnary logstc model does not make the assumpton of lnearty between dependent and ndependent varables and does not assume homoskedastcty (CIMMYT, 1993). Hence, the logstc model s selected for ths study. The bnary dependent varable was defned as 1 f the consumer prefers organc vegetables and 0 otherwse. Ths paper focuses on consumers preference of organc vegetables, whch sgnfes ther wllngness or lack thereof to buy organc vegetables. As posted earler, consumers purchase ntenton s affected by 7 factors. Therefore the relatonshp between purchase ntenton and the 7 factors s concluded as follows: consumers purchase ntenton of organc vegetables = F (age, educaton, ncome, etc.) + random dsturbng factor. The probablty that a consumer prefer organc vegetables was postulated as a functon of some socoeconomc, demographc characterstc and other (dstance, prce, health, ncome, avalablty) factors. Ths paper adopts the logt model of bnary choce, confnes the number of dependent varable wthn the [0 1] scope and utlzes the maxmum lkelhood estmaton method to compute the regresson parameter. Therefore, the cumulatve logstc probablty model s econometrcally specfed as follows: 1 P F( Z ) F( X ) (1 z e ) (1) Where P s the probablty that a consumer wll prefer organc vegetables or not gven X; e denotes the base of natural logarthms, whch s approxmately equal to 2.718; X represents the th explanatory varables; and g and l are parameters to be estmated. (Hosmer, and Lemeshew, 1989) ponted out that the logt model could be wrtten n terms of the odds and log of odds, whch enables one to understand the nterpretaton of the coeffcents. The odds rato mples the rato of the probablty (P) that a consumer wll prefer to the probablty (1-P) that the consumer wll not prefer organc vegetables: Z (1 Therefore, P 1 P P ) 1 e 1 e (1 z z 1 e e The natural log of equaton (3), wll gve: P 1 P ln 1 X1 2X 2... z z ) m (2) (3) X n (4) If the dsturbance term () U s taken nto account, the logt model becomes: Z m 1 X U (5) Equaton (3) was estmated by maxmum lkelhood method. Ths procedure does not requre assumptons of normalty or homoskedastcty of errors n predctor varables. The logt equaton was ftted to fnd out the determnants nfluencng the consumpton of organc vegetables. The model used n ths study s gven below. Z = + 1 (AGE) + 2 (EDN) + 3 (DIS) + 4 (PRI) + 5 (HLT) + 6 (INC) + 7 (AVAI) + U Where, Z = Y 1 to 7 - Coeffcents of ndependent varables - Intercept U - Error term The descrpton of the varables and ther expected sgns are gven below n Table 1.

5 3890 Trends n Boscences 7 (23), 2014 Table 1. Defnton of the Varables n the Logstc Regresson Model Varable Expected Effect (sgn) Y, Consumer preference, (1 f the consumer prefers organc vegetables, 0 otherwse) AGE, Age of the consumer (n years) + / - EDN, Educatonal status of the consumer (n years) + / - DIS, Dstance of organc outlet from consumer s resdence (n km) + / - PRI, Prce of organc vegetables (Rs. / kg) - HLT, Health Awareness level of the consumer (Scale of 1 to 5) + INC, Income of the consumer (Rs. / Annum) + /- AVAI, Avalablty of the organc vegetables to the consumers, (1 f organc vegetables are avalable to consumer, 0 otherwse) + /- Garrett s Rankng Technque In order to rank the constrants faced n consumpton of organc vegetables, the Garrett s rankng technque (Hendry, and Worth, 1969) was employed. The order of mert assgned by the respondents was converted to ranks by usng the formula, Per cent poston= 100 (R j -0.5) N j Where, R j - Rank gven for the th factor by the j th respondent; N j - Number of factors ranked by the j th respondent. The per cent poston of each rank thus obtaned was converted nto scores by referrng to the table gven by Garrett. For each factor, the scores of ndvdual respondents were added together and the mean score was calculated. Then based on the mean scores, the ranks were gven. These mean scores for all the factors were arranged n the descendng order and the most mportant factors were dentfed. RESULTS AND DISCUSSION The detals on age-wse dstrbuton of the sample households n Combatore cty s presented n Table 2. From the table, t could be observed that as the age of consumers ncrease the probablty of preference of organc vegetables also ncrease. The aged consumers would more lkely prefer to organc vegetables because of ts safety, ndgenous n nature and taste. Further, around 33 per cent of the sample organc consumers belonged to the age group of above 60 years. Nearly, 26 per cent of them were n the age group of 46 to 60 years and 23 per cent were n the age group of years and 16 per cent were n the age group of below 35 years. Almost 60 per cent of the sample respondents fall n the age group of above 45 years whch ndcates that older consumers tend to make preventve health decsons, partly because of health vulnerablty and an awareness that they are generally at hgher health rsk than younger ndvduals as seen elsewhere. The educatonal status of sample respondents s presented n Table 3. It could be observed from the table that around 60 per cent of the sample organc vegetable consumers have completed collegate level of educaton, followed by the consumers who have completed the secondary school of educaton accountng for 23 per cent and 10 per cent of the consumers had hgher secondary level of educaton and only 6 per cent of the total organc vegetable consumer households had elementary level of educaton. Overall, t s shown that the lterates prefer organc vegetables than the llterates. Ths s because lterates are more conscous about health. It s clear that lteracy s drectly proportonal to organc vegetables consumpton. The ncome-wse dstrbuton of sample respondents s presented n Table 4. It could be observed from the table that around 42 per cent of the sample organc consumers have a monthly ncome of above Rs. 60,000 followed by the consumers wth a monthly ncome between Rs. 30,000-60,000 and 23 per cent of the consumers wth a monthly ncome below Rs. 30,000. Overall, t s shown that the consumers wth hgher ncome prefer organc vegetables than the consumers wth lower ncome (The ncome of nearly 75 per cent of the respondents were more than Rs. 30,000). It s observed that ncome s drectly proportonal to organc vegetables consumpton. The analyss of the determnants of consumer preference of organc vegetables was carred out n the study. In addton, the margnal mpacts of changes n the ndependent varables on the probablty of preference were also determned. The nterpretaton of these margnal mpacts s dependent on the unt of measurement of the ndependent varables. The result of the analyss of consumer preference s presented n Table 5. The log-lkelhood, the Pseudo R 2 and the LR (Ch 2 ) (sgnfcant at 1 per cent level), mples that the

6 SHANMUGAPRIYA, et al., Consumer Preference of Organc Vegetables n the Combatore Cty of Taml Nadu 3891 Table 5. Logstc Estmates of the factors that affect Consumer Preference Determnants Coeffcent Std. Err. Margnal Effects Age (years) Educaton (years) 0.063*** Dstance (km) *** Prce (Rs. / kg) *** Health Awareness (1 to 5) 1.215** Income (Rs. / annum) 0.001** Avalablty Constant Log lkelhood = LR ch 2 (10) = Prob > ch 2 = Pseudo R 2 = Note: **sgnfcant at 5 per cent level; ***sgnfcant at 10 per cent level model was well ftted and the explanatory varables used n the model were collectvely able to explan the consumers decson to prefer organc vegetables. Many of the ncluded varables were statstcally sgnfcant n determnng the consumers decson to prefer organc vegetables. The coeffcent of age of the farmer was postve (0.161) and sgnfcant at 10 per cent level n the model. It could be assumed that as the age of consumers ncrease the probablty of preference of organc vegetables. Ths could be due to the fact that aged consumers would be more lkely to prefer organc vegetables because of ts safety, ndgenous n nature and taste. The result of the margnal effects also revealed that an addtonal year to the age of the consumer would ncrease the probablty of preference of organc vegetables by per cent. The coeffcent of access to educatonal qualfcaton (0.063) was postve and sgnfcant at 10 per cent level. Probably, educaton could make the consumer to become more of health conscous. Margnal effects show that among the sample consumers an ncrease n educaton by one more year of study would ncrease the probablty of preference of organc vegetables by per cent. The coeffcent of dstance of organc outlet was found negatve (-0.341) and sgnfcant at 10 per cent level. Ths shows that consumers wth large dstances of organc outlet have less probablty of preference of organc vegetables. Prce had negatve nfluence (-1.076) and was found to be sgnfcant at 10 per cent level. It was observed that wth ncrease n prce of organc vegetables there was less probablty of preference of organc vegetables. Ths was due to the fact that, the rse n prces of organc vegetables would lead to reducton n quantty demanded. The coeffcent of health (1.215) sgnfcant at 5 per cent level, ncome of consumers (0.001) sgnfcant at 5 per cent level and avalablty of organc vegetables (0.653) sgnfcant at 10 per cent level had postve nfluences on consumer preference of organc vegetables. It was observed that probablty of preference of organc vegetables ncreased because of health value. Many consumers expressed that they shfted to organc vegetables because t s safe to consume and ndgenous n nature wthout the use of chemcals and s envronment frendly. Margnal effects also ndcated that the probablty of preference of organc vegetables ncreases by per cent for every unt ncrease n the consumers awareness on health ssues. Smlarly, for every unt ncrease n ncome and avalablty of organc produce were also found to ncrease the probablty of preference by per cent and per cent respectvely. In order to assess the constrants faced by organc consumers, Garrett s rankng technque was employed. The result s presented below n Table 6. It could be observed from the table that hgh prce rankng I s the major constrant whch nfluence the purchase of organc vegetables wth the mean score of 56 followed by lmted or nadequate supply rankng II wth the mean score of 28 and fnally lack of nformaton s also one of the factor whch nfluence the purchase decson of organc vegetables rankng III wth the mean score of 15. Overall, t s observed that hgh prce than the conventonal vegetables s the major constrant nfluencng the purchase decson of the consumers of organc vegetables.

7 3892 Trends n Boscences 7 (23), 2014 Table 3. Constrants cted by respondents n the purchase decson of organc vegetables Perceved Constrants Source Rank Hgher prce than conventonal produce I Lmted / nadequate supply II Lack of nformaton III Inadequate organc outlets IV Doubts over authentcty of the organc produce V Percevng no dfference between organc and conventonal produce 8.13 VI Source: Author s survey Ths study nvestgated the factors nfluencng the consumer preference to purchase organc vegetables and the constrants faced by the respondents n purchase of organc vegetables. Survey results showed that almost 60 per cent of the sample respondents fall n the age group of above 45 years whch ndcates that older consumers tend to make preventve health decsons, partly because of health vulnerablty and an awareness that they are generally at hgher health rsk than younger ndvduals. About 60 per cent of the sample organc vegetable consumers have completed collegate level of educaton and ths mples that hgher educaton was more lkely an mportant factor nfluencng the purchase motve of organc vegetables. Around 42 per cent of the sample organc consumers have a monthly ncome of above Rs. 60,000 and t reflects that the consumers wth hgh ncome often buy organc vegetables to reflect on ther awareness and status. The logstc regresson suggests that age, educaton, health, ncome, prce, dstance and avalablty are mportant factors n consumer preference of organc vegetables. Garrett s rankng technque suggests that prce s the major constrants faced by the consumers n makng purchase decsons of organc vegetables followed by lmted or nadequate supply, lack of nformaton and nadequate organc outlets. Keepng n vew of the results of the study, the polcy suggestons concluded are: To encourage farmers and to create awareness among the consumers, the accredtaton programme for certfcaton, norms for organc producton and promoton of organc farmng under the Natonal Programme for Organc Producton (NPOP) should be mplemented vgorously. Government nterventon by provdng subsdy s the mmedate requrement to encourage farmers who grow crops organcally. Publc extenson system should focus exclusvely on creatng organc farmers assocaton. Steps may be taken to create awareness among the consumers through educatng and publczng by all possble means and mass meda about the mportance of organc products and ts health benefts to tap the domestc and export market demand. Government should thnk of ntroducng MSP for organc products separately to control the hgh prce of organc products whch s the major factor that affects the consumpton of organc vegetables. Organc certfcaton labels should be provded for organc products, by the government ndcatng the date of manufacture and the date of expry. Ths label s the guarantee for consumers that the product s organc. LITERATURE CITED Alston, J.M. G.W. Norton and P.G. 1995, Scence under Scarcty: Prncple and Practce of Agrcultural Research Evaluaton and Prorty Settng. Ithaca: Cornell Unversty Press. Arvantoyanns, I. and Krystalls, A Current State of the Art of Legslaton and Marketng Trends of Organc Foods Worldwde In: Marketng Trends for Organc Food n the Advent of the 21 st Century (Baouraks, G. ed.), World Scentfc Publshng, Co. Pte Ltd, pp Bhaskaran, S. and Hardley, F. 2002, Buyer belef, atttudes and behavour foods wth Therapetc Clams, Journal of Consumer Marketng, 19(7) Bourn, D. and Prescott, J. 2002, A comparson of the nutrtonal value, sensory qualtes and food safety of organcally and conventonally produced foods, Crtcal Revews n Food Scence and Nutrton. 42(1): Brz, T. and Ward, R.W Consumer awareness of organc products n Span: an applcaton of multnomal logt models, Food Polcy, 34 (3) : Calatrawa-Leyva, J., Franco, J.A. and Gonzalez-Rao, M.C Adopton of Sol Conservaton practces n Olve Groves: The Case of Spansh Mountanous Areas: In : XI Internatonal Congress of the European Assocaton of Agrcultural Economsts, Denmark, August Daves, A., Ttterngton, A. and Cochrane, C. 1995, Who buys organc food? A profle of the purchasers of organc n Northern Ireland, Brtsh Food Journal. 97(10): Food and Agrcultural Organsaton. 1999, Organc Agrculture. Goldman, M. C. and Hylton, W The Basc Book of Organcally Grown Foods. Erasmus, Pennsylvana, Rodale Press.

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