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The Price of Happy Hens: A Hedonic Analysis of Retail Egg Prices

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Author Info

  • Chang, Jae Bong
  • Lusk, Jayson L.
  • Norwood, F. Bailey

Abstract

This paper analyzes price differentials among conventional, cage-free, organic, and Omega-3 eggs using retail scanner data from two regional markets and the United States as a whole. Results reveal significant premiums attributable to cage-free (a 57% premium on average) and organic (an 85% premium on average). However, significant variation exists among geographic locations; price premiums for organic over conventional eggs in Dallas are almost twice as high as those in San Francisco. Estimates indicate that about 42% of the typically observed premium for cage-free eggs over conventional eggs (and 36% of the premium for organic eggs) can be attributed to egg color rather than differences in hens’ living conditions. Despite the large implicit price premiums for cage-free and organic, our data reveal that most shoppers are not willing to pay such high prices for cage-free and organic attributes.

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Bibliographic Info

Article provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.

Volume (Year): 35 (2010)
Issue (Month): 3 (December)
Pages:

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Handle: RePEc:ags:jlaare:97855

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Web page: http://waeaonline.org/
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Related research

Keywords: animal welfare; cage-free; eggs; free-range; hedonic; organic; Demand and Price Analysis; Livestock Production/Industries;

References

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  1. Lusk Jayson L, 2010. "The Effect of Proposition 2 on the Demand for Eggs in California," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 8(1), pages 1-20, April.
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Citations

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Cited by:
  1. Heng, Yan & Hanawa Peterson, Hikaru & Li, Xianghong, 2013. "Consumer Attitudes toward Farm-AnimalWelfare: The Case of Laying Hens," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(3), December.
  2. Wilson, Adam P. & Wilson, Norbert L., 2013. "The Economics of Quality in the Specialty Coffee Industry: Insights from the Cup of Excellence Auction Programs," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150721, Agricultural and Applied Economics Association.
  3. Saitone, Tina L. & Sexton, Richard J. & Sumner, Daniel A., 2013. "What Happens When Food Marketers Require Restrictive Farming Practices?," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151268, Agricultural and Applied Economics Association.
  4. Empen, Janine, 2011. "Preissetzung Auf Dem Deutschen Joghurtmarkt: Eine Hedonische Analyse," 51st Annual Conference, Halle, Germany, September 28-30, 2011 115362, German Association of Agricultural Economists (GEWISOLA).
  5. Li, Xianghong & Peterson, Hikaru Hanawa & Xia, Tian, 2012. "U.S. Consumer Demand for Differentiated Eggs," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124687, Agricultural and Applied Economics Association.
  6. Jayson Lusk, 2011. "The market for animal welfare," Agriculture and Human Values, Springer, vol. 28(4), pages 561-575, December.
  7. McFadden, Brandon R. & Lusk, Jayson L. & Crespi, John M. & Cherry, J. Bradley C. & Martin, Laura E. & Bruce, Amanda S., 2013. "Consumer Response to Egg Production Systems and the Effect of Proposition 2 Advertising: A Preliminary Neuroeconomic Analysis," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150437, Agricultural and Applied Economics Association.
  8. Lu, Yiqing & Cranfield, John & Widowski, Tina, 2013. "Consumer Preference for Eggs from Enhanced Animal Welfare Production System: A Stated Choice Analysis," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150276, Agricultural and Applied Economics Association.
  9. Heng, Yan & Peterson, Hikaru Hanawa & Li, Xianghong, 2012. "Consumers’ Preferences for Shell Eggs Regarding Laying Hen Welfare," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124592, Agricultural and Applied Economics Association.
  10. Vickner, Steven S., 2012. "Measuring the Value of Convenience: A Hedonic Pricing Model Approach in the Market for Breakfast Sausages," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124902, Agricultural and Applied Economics Association.

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