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Estimation of consumer income impact on the purchase of organic products

Author(s) Penkova O. G., Doctor of Economics, ,
Tsymbaliuk Y.A., Candidate of Economics Sciences, , Uman National University of Horticulture, Ukraine
Category Economics
year 2018 issue Випуск №92. Частина 2
pages 98-107 index UDK 338.439.52:330.564.2
DOI
Abstract For the last two decades, global organic production has been developing dynamically. The largest consumption of organic products per capita in 2015 was recorded in Switzerland (USD 291, EUR 262), Denmark (USD 212, EUR 190.7) and Sweden (USD 196, EUR 177.1). They are countries with a high level of citizen income. This allows us to propose a hypothesis that the income level is one of the most important factors in the consumption of organic products. Using a systematic approach to the analysis of economic processes, conclusions and provisions of general economic theory, empirical methods of cognition, in particular analysis and synthesis, induction and deduction and statistical methods, this article deals with the estimation of consumer income impact on the purchase of organic products in 2010-2016 in general for the EU and for individual EU member states, ranked by the level of consumption of organic products per capita. The analysis of the income dynamics of the EU population and consumption of organic products per capita in 2010-2015 indicates a link between these indicators. For this period, income per capita grew by 15.2% and consumption of organic products by 33%. It is found that among the considered EU countries with a high and average consumption level of organic products per person, compared with the EU average, the difference in incomes is mostly insignificant, excluding Luxembourg. Speaking about differences in the share of purchasing organic products, they are due to the effect of other demand factors in each of the considered countries (price, social, psychological, demographic factors, etc.). The analysis of the share of purchasing food and non-alcoholic beverages in total consumer spending and the share of purchasing organic products in income shows an inverse relationship between these indicators for EU countries with different levels of income and consumption of organic products. Results of the correlation-regression analysis on the relationship between income and consumption of organic products in individual EU countries indicate a statistically significant relationship between the studied parameters, excluding Belgium and Hungary. In general, concerning the EU, it can be concluded that the growth in consumption of such products by 96.61% is due to the growth of consumers’ incomes.
Key words consumer incomes, consumer behavior, demand factors, organic products, consumption of organic products
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