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An experimental approach to valuing information

Author

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  • Tyler J. Klain
  • Jayson L. Lusk
  • Glynn T. Tonsor
  • Ted C. Schroeder

Abstract

This article proposes a method to directly measure the value of information (VOI) conveyed in a label. Using data collected from a field experiment conducted in two grocery stores in Texas, we find the VOI contained in U.S. federally mandated country of origin labels for beef and pork is 36% lower using the new direct elicitation compared to the conventional approach. The mean value-of-origin information, in the context of our experiment, ranges from $0.016 to $1.08 per pound of steak/chop purchased, depending on the valuation method used and assumptions about labeling knowledge and average volume purchased per choice. The VOI is substantively influenced by ethnocentrism and meat consumption frequency.

Suggested Citation

  • Tyler J. Klain & Jayson L. Lusk & Glynn T. Tonsor & Ted C. Schroeder, 2014. "An experimental approach to valuing information," Agricultural Economics, International Association of Agricultural Economists, vol. 45(5), pages 635-648, September.
  • Handle: RePEc:bla:agecon:v:45:y:2014:i:5:p:635-648
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    File URL: http://hdl.handle.net/10.1111/agec.12112
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    References listed on IDEAS

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    2. Balcombe, Kelvin & Bradley, Dylan & Fraser, Iain & Hussein, Mohamud, 2016. "Consumer preferences regarding country of origin for multiple meat products," Food Policy, Elsevier, vol. 64(C), pages 49-62.
    3. Jo, Jisung & Lusk, Jayson L. & Muller, Laurent & Ruffieux, Bernard, 2016. "Value of parsimonious nutritional information in a framed field experiment," Food Policy, Elsevier, vol. 63(C), pages 124-133.
    4. Maurizio Canavari & Andreas C. Drichoutis & Jayson L. Lusk & Rodolfo M. Nayga, Jr., 2018. "How to run an experimental auction: A review of recent advances," Working Papers 2018-5, Agricultural University of Athens, Department Of Agricultural Economics.
    5. Daniel E. Chavez & Marco A. Palma, 2019. "Pushing subjects beyond rationality with more alternatives in experimental auctions," Agricultural Economics, International Association of Agricultural Economists, vol. 50(2), pages 207-217, March.
    6. Jason M. Bienenfeld & Elizabeth R. Botkins & Brian E. Roe & Marvin T. Batte, 2016. "Country of origin labeling for complex supply chains: the case for labeling the location of different supply chain links," Agricultural Economics, International Association of Agricultural Economists, vol. 47(2), pages 205-213, March.
    7. Lee, Ji Yong & Fox, John A., 2016. "The effects of allowing substitutes on bidding behavior in a private value experimental auction," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235900, Agricultural and Applied Economics Association.

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