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Abstract

Using the 2014 Nielsen Homescan panel data, the Heckman two-stage sample selection model estimates the likelihood of purchasing organic and conventional flour as well as the quantity purchased of each. A number of demographic variables are found to be statistically significant impacting the likelihood of purchasing organic and conventional flour. Own-price elasticities of demand for organic and conventional flour indicate that the demand for both flour types is inelastic. Cross-price elasticities of demand suggest an asymmetric pattern between organic and conventional flour demand. Finally, organic and conventional flour are found to be inferior goods.

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