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Economic Evidence of Willingness to Pay for the National Animal Identification System in the US

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  • Resende Filho, Moises de Andrade
  • Buhr, Brian L.

Abstract

This 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 Info

Paper provided by International Association of Agricultural Economists in its series 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia with number 25342.

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Date of creation: 2006
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Handle: RePEc:ags:iaae06:25342

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Web page: http://www.iaae-agecon.org/
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Related research

Keywords: Animal Identification System; Food Safety; System of Demand Equations; Meat Industry; USA; Food Consumption/Nutrition/Food Safety; Livestock Production/Industries; C22; Q11; Q13; Q18;

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  1. Bailey, DeeVon & Slade, Jeremy, 2004. "Factors Influencing Support For A National Animal Identification System In The United States," 2004 Annual meeting, August 1-4, Denver, CO 20293, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Dickinson, David L. & Bailey, DeeVon, 2002. "Meat Traceability: Are U. S. Consumers Willing To Pay For It?," 2002 Annual meeting, July 28-31, Long Beach, CA 19670, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Cashin, Paul, 1991. "A Model Of The Disaggregated Demand For Meat In Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 35(03), December.
  4. Alston, Julian M. & Chalfant, James A. & Piggott, Nicholas E., 2001. "Incorporating demand shifters in the Almost Ideal demand system," Economics Letters, Elsevier, vol. 70(1), pages 73-78, January.
  5. Hobbs, Jill E., 2003. "Consumer Demand For Traceability," Working Papers 14614, International Agricultural Trade Research Consortium.
  6. DeeVon Bailey & Jeremy Slade, 2004. "Factors Influencing Support for a National Animal Identification System for Cattle in the United States," Working Papers 2004-09, Utah State University, Department of Economics.
  7. Carter, Colin A. & Smith, Aaron D., 2004. "The Market Effect of a Food Scare: The Case of Genetically Modified StarLink Corn," Working Papers 11997, University of California, Davis, Department of Agricultural and Resource Economics.
  8. Nicholas E. Piggott & Thomas L. Marsh, 2004. "Does Food Safety Information Impact U.S. Meat Demand?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 154-174.
  9. Douglas Fisher & Adrian R. Fleissig & Apostolos Serletis, 2001. "An empirical comparison of flexible demand system functional forms," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(1), pages 59-80.
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Cited by:
  1. Larson, Ronald B. & Rana, Kulmani, 2011. "Consumer Support for Food Tracing with RFID Technology," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103672, Agricultural and Applied Economics Association.
  2. Seyoum, Bruk Tefera & Adam, Brian D. & Ge, Candi, 2013. "The Value of Genetic Information in a Whole-Chain Traceability System for Beef," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150458, Agricultural and Applied Economics Association.

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