Econometric analysis of consumer preferences and willingness-to-pay for organic tomatoes in Palestine: Choice experiment method

This study aimed to examine consumers’ willingness to pay a premium price for several environmental attributes of organic tomato to increase both producer production and consumer health in Palestine. The paper adopts the choice experiment method using the econometric analysis of the random utility model. The research questions of this study focus on awareness of the importance of ensuring / securing the environment, how many households in the West Bank purchase organic tomatoes, reasons for which households may be willing or not willing to pay more for organic tomatoes, and the main socio-economic variables that affect the households willingness to pay for organic tomatoes when making organic tomatoes choices. The empirical results show that organic tomatoes are preferred to conventional ones because of health claims by respondents so that we conclude that respondents are willing to pay more for organic tomatoes compared to conventional ones. Additionally, consumers prefer organic products because of health and environmental benefits. Some policy measures might further promote the consumption of organic products. These include creating awareness of the relevance of consuming organic products through effective marketing and educational campaigns. However, there are about 500 organic farms in Palestine with a total area of 1’0000 square meters mainly under fruit, almond, olives and dates. According to the Palestinian Agricultural Relief Committee, organic pasturelands are not found because of the Israeli control (German Development Agency GTZ) and according to the ministry of agriculture in Palestine, there are 24 organic olive farms with a total area of 18885 square meters. Key words: Econometric Models, Choice Experiment Method, Mixed Logit Model, Palestine, Willingness to Pay.