Household‐Level Welfare Effects of Organic Milk Introduction

Using household scanner data and a discrete choice modeling approach, we estimate demand for milk products at the micro‐level and compute the distribution of welfare effects from introducing organic milk across households with different characteristics within the partial equilibrium framework. The price effects of introducing organic milk are larger for low‐income households than for high‐income households, and the differences in the variety effects of introducing organic milk to groups with various levels of education are larger than the differences in the variety effects among groups with different income levels. Policy implications of these findings are discussed.