Economic Evidence of Willingness to Pay for the National Animal Identification System in the US
AbstractThis article investigates the willingness to pay for the National Animal Identification System (NAIS) in the US. It is assumed that with the NAIS in place, consumers' risk perception about zoonosis, BSE or mad cow and residues in meat may be mitigated. Therefore, food safety indices for beef, pork and poultry summing the number of references to meat safety found in the top fifty English language news articles in circulation in the US have been constructed. These indices were incorporated in generalized almost ideal demand systems to estimate the effect of those food safety scares on the demand for meat in the US. It has been found that food safety impacts upon the final demand for meat in the US are small and do not show lagged effects. Using the preferred model, three scenarios have been constructed on the basis of hypothesized impacts of the NAIS on consumers' food safety concerns about meat. Finally, the differences in the predicted total revenue for beef, pork and poultry between scenarios are used as gross measures of the NAIS' economic value to the meat sector. The main conclusion is that if the defense of the NAIS is based on its effect on the demand side of the market for meats it is expected that the US Federal government will need to pay for a great part of the costs with the NAIS; otherwise the NAIS is likely to be economically unfeasible in the US.
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Bibliographic InfoPaper provided by International Association of Agricultural Economists in its series 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia with number 25342.
Date of creation: 2006
Date of revision:
Animal Identification System; Food Safety; System of Demand Equations; Meat Industry; USA; Food Consumption/Nutrition/Food Safety; Livestock Production/Industries; C22; Q11; Q13; Q18;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
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