Food for Thought : Essays on Green Public Procurement and the Market for Organic Food

Sammanfattning: Paper [I] In this paper, we study a Green Public Procurement (GPP) policy decided by the Swedish government in 2006, stating objectives related to organic farming. The policy aims to increase the public sector's organic food purchases, in order to incentivise Swedish farmers to convert to organic practices, thereby contributing to national environmental quality objectives. We analyse the effect of organic food procurement on organic agricultural land, using panel data from 2003 to 2016 including information on municipalities' organic food purchases, land use, and direct subsidies aimed at organic production. Based on different specifications and mainly FGLS estimations, we conclude that the 2006 organic food policy is associated with a significant positive impact on organic agricultural land. A significant effect of direct agricultural policy in the form of subsidies is also found.Paper [II] In this paper, we analyse the uptake of a national and voluntary green public procurement policy among Swedish municipalities. The policy, decided in 2006, was intended to contribute to increased organic farming by stipulating that at least 25 percent of public food purchases be organic. Based on survey data on municipalities’ organic food purchases for the period 2003–2016, supplemented with municipal characteristics, we analyse the determinants underpinning uptake of the policy, accounting for potential selection bias. The main finding is that political goals have a significant and positive effect on the share of organic food purchases, suggesting that there is an uptake and that the voluntary policy is in fact implemented. Secondly, we find that the increase in expenditures per capita devoted to organic food is quite substantial following the adoption of an organic food policy.Paper [III] In this paper, I study consumer demand for organic and conventional milk, using weekly scanner data from the Swedish retail market for the years 2011–2017. Own- and cross-price elasticities of demand are estimated using a quadratic almost ideal demand system. The paper contributes to previous literature by (i) studying a market with relatively small organic price premiums, (ii) using a highly representative sample of retailers, and (iii) differentiating between private labels and brands. Results show that demand for organic milk is relatively elastic, despite relatively small organic price premiums in the Swedish milk market. Results also show that demand for branded products is, generally, less price elastic compared to private label products, suggesting that consumers have strong preferences for traditional, regional brands.Paper [IV] In this paper, I analyse wholesale to retail price transmission for organic and conventional milk in the Swedish milk sector, using time-series analysis applied to monthly price data for the period Jan 2007–Nov 2017. Although much empirical work addresses the efficiency of food supply chains by studying price transmission, studies on price transmission for quality-differentiated food are scarce, and particularly for organic food vis-á-vis conventional food. This study adds to this scarce literature. Estimations are performed using the non-linear ARDL model which allows for asymmetric cointegration of prices and a simultaneous analysis of short- and long-run asymmetry, the latter of which has been largely overlooked in previous studies. In the case of conventional milk, results indicate positive asymmetries in magnitude both in the short-run and the long-run. For organic milk, the long-run positive asymmetry is less pronounced and organic consumers are therefore likely to experience smaller differences between surplus losses and gains following positive and negative wholesale price changes, respectively.