Rural urban difference in willingness to pay for organic vegetables in Vietnam

Abstract

The concern about vegetable safety, together with a booming population and the rise of the middle class has made Vietnam become a potential market for organic vegetables. This paper investigates the determinants of willingness to pay (WTP) for organic vegetables with a particular attention to regional differences and the effect of risk perception in Vietnam. Using Contingent Valuation Method to analyze the data from a sample of 498 consumers in Hanoi, the paper revealed the differences, as well as the similarities in the determinants of WTP for organic vegetables across the regions. The perceived use values of organic vegetables, trust in organic labels, and family disposable income increased WTP for organic vegetables in both regions. Though risk perception of regular vegetables was high in both regions, high price ultimately prevented consumers to act on their preference for organic vegetables in the urban region. In addition, the percentage of homegrown vegetables in the total vegetable consumption of the family influenced the WTP in the rural region only. Moreover, being an organic purchaser was positively related to the WTP in the urban region but not in the rural region. Three policy implications to boost the demand for organic food in Vietnam were drawn.