Consumer Willingness to Pay a Premium for Organic Wine: Discriminant analysis
Osadebamwen Anthony Ogbeide (2015). Consumer Willingness to Pay a Premium for Organic Wine: Discriminant analysis, Mayfair Journal of Agribusiness Management 1(1), 24-42

Abstract
Consumer interest in organic wine is growing but the production process and the benefits in such products create a challenge. Producers require premiums for their products due to the difficult production environment and the perceived benefits in their products. However predicting consumers’ willingness to pay (WTP) for the benefits of organics is hard. This study explores the characteristics of consumers that are willing to pay premium for organic product and those unwilling. This research is significant; it will assist producers/marketers to provide products to consumers in a sustainable manner. The survey was carried online with wine consumers on a database. The Stata 12 software was used to analyse the variable statistics, factor analysis and discriminant analysis. The results indicated that consumers’ knowledge of organic wine, their attitude, perceived risk and risk reduction strategy affect WTP a premium for organic wine. The discriminant analysis shows the consumers willing and those unwilling to pay premium were significantly different. From a managerial perspective, it will be cost-effective to target these consumers groups differently in terms of communication and offering. As a limitation, one of the screening criteria may have discriminated against the new wine converts and thus reduced the total variability of the population.

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