Date of Award

8-2019

Document Type

Thesis

Degree Name

Master of Science (MS)

Department

Economics

Committee Member

Lisha Zhang, Committee Chair

Committee Member

Michael Vassalos

Committee Member

Nathan B Smith

Abstract

U.S. consumption of dairy products is trending upward, however, per capita consumption of fluid milk has decreased (USDA, 2017). By contrast, organic milk and other milk produced in non-conventional ways have experienced significant growth (AMS, 2017). By examining the preferences of specific consumer groups, dairy producers can make production decisions that better fit consumers' needs, which can in turn lead to a more efficient market for fluid milk in the U.S.

This thesis seeks to identify factors that can influence consumers' decision to purchase organic and local fluid milk. The data is obtained from a 2015 nationwide online survey of U.S. consumers, in which participants were asked to evaluate their preferences toward different milk attributes.

Results of Probit model for organic milk consumers indicate that younger males, that are members of a fitness club, and find nutrition to be important, have the highest probability of purchase. Additionally, non-conventional factors of production, for example organic and non-GMO are also important to organic milk consumers. Results from a Tobit model for local milk consumers also find younger males that are fitness members to have a high probability of purchasing local milk, but also the presence of children in the household increases this probability. It was also found that local and brand were extremely important to local consumers, suggesting that they buy local for the connection or experience to help their local economy.

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