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A calibrated auction-conjoint valuation method: Valuing pork and eggs produced under differing animal welfare conditions

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  • Norwood, F. Bailey
  • Lusk, Jayson L.

Abstract

This paper develops a valuation method which generates consistent and systematic estimates of people's preferences for complex multi-attribute goods by inextricably linking auction bids with conjoint ratings. The advantage of the valuation approach is that it permits the estimation of people's values for many potential goods, allows one to decompose people's values for a good into its sub-components, and permits the study of preference heterogeneity without distributional assumptions. We apply the method to an important and increasingly controversial topic: animal welfare. The method is used to determine people's preferences for eggs and pork produced from different production systems. Data from experiments conducted in three diverse U.S. locations (Chicago, IL; Dallas, TX; and Wilmington, NC) indicates that people are, on average, willing to pay $0.95 more for a dozen eggs raised in an aviary, pasture system vs. a cage system, and are willing to pay $2.02 more for two-pounds of pork chops raised in a pasture system as opposed to a crate system.

Suggested Citation

  • Norwood, F. Bailey & Lusk, Jayson L., 2011. "A calibrated auction-conjoint valuation method: Valuing pork and eggs produced under differing animal welfare conditions," Journal of Environmental Economics and Management, Elsevier, vol. 62(1), pages 80-94, July.
  • Handle: RePEc:eee:jeeman:v:62:y:2011:i:1:p:80-94
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    References listed on IDEAS

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    Cited by:

    1. Ortega, David L. & Wang, H. Holly & Wu, Laping & Hong, Soo Jeong, 2015. "Retail channel and consumer demand for food quality in China," China Economic Review, Elsevier, vol. 36(C), pages 359-366.
    2. Avitia, Jessica & Costa-Font, Montserrat & Gil, Jose Maria & Lusk, Jayson L., 2011. "A Calibrate Auction-conjoint Experiment to Elicit Consumer Valuation of Sustainable Farming: Is Agro-systems Preservation Relevant?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114213, European Association of Agricultural Economists.
    3. 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.
    4. Araña, Jorge E. & León, Carmelo J., 2013. "Dynamic hypothetical bias in discrete choice experiments: Evidence from measuring the impact of corporate social responsibility on consumers demand," Ecological Economics, Elsevier, vol. 87(C), pages 53-61.
    5. Laurent Muller & Bernard Ruffieux, 2011. "Do price-tags influence consumers’ willingness to pay? On the external validity of using auctions for measuring value," Experimental Economics, Springer;Economic Science Association, vol. 14(2), pages 181-202, May.
    6. McIntosh, Christopher R., 2014. "Preference reversals: experimental review and a new idea for using arbitrage within the double bound dichotomous choice elicitation method," Western Economics Forum, Western Agricultural Economics Association, vol. 13(01).
    7. repec:oup:erevae:v:44:y:2017:i:1:p:3-31. is not listed on IDEAS
    8. Loomis, John B., 2014. "2013WAEA Keynote Address: Strategies for Overcoming Hypothetical Bias in Stated Preference Surveys," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 39(1), April.
    9. Francisco Alex J. & Bruce Jared M. & Lim Seung-Lark & Bruce Amanda S. & Crespi John M. & Lusk Jayson L. & McFadden Brandon & Aupperle Robin L., 2015. "Are Consumers as Constrained as Hens are Confined? Brain Activations and Behavioral Choices after Informational Influence," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 13(1), pages 113-119, January.
    10. Mikolaj Czajkowski & Nick Hanley & Jacob LaRiviere, 2015. "The Effects of Experience on Preferences: Theory and Empirics for Environmental Public Goods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(1), pages 333-351.
    11. Disdier, Anne-Célia & Marette, Stéphan & Millet, Guy, 2013. "Are consumers concerned about palm oil? Evidence from a lab experiment," Food Policy, Elsevier, vol. 43(C), pages 180-189.
    12. Laura Mørch Andersen, 2011. "Animal Welfare and Eggs – Cheap Talk or Money on the Counter?," Journal of Agricultural Economics, Wiley Blackwell, vol. 62(3), pages 565-584, September.
    13. Robert J. Johnston & Eric T. Schultz & Kathleen Segerson & Elena Y. Besedin & Mahesh Ramachandran, 2012. "Enhancing the Content Validity of Stated Preference Valuation: The Structure and Function of Ecological Indicators," Land Economics, University of Wisconsin Press, vol. 88(1), pages 102-120.
    14. Loureiro, Maria L. & Gracia, Azucena & Nayga, Rodolfo M., 2013. "Do experimental auction estimates pass the scope test?," Journal of Economic Psychology, Elsevier, vol. 37(C), pages 7-17.
    15. Gulati, Kajal & Ward, Patrick & Lybbert, Travis & Spielman, David, 2016. "Intrahousehold valuation, preference heterogeneity, and demand of an agricultural technology in Bihar, India," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236280, Agricultural and Applied Economics Association.
    16. Heng, Yan & Hanawa Peterson, Hikaru & Li, Xianghong, 2013. "Consumer Attitudes toward Farm-Animal Welfare: The Case of Laying Hens," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(3), December.
    17. repec:bla:jconsa:v:47:y:2013:i:1:p:98-127 is not listed on IDEAS
    18. repec:sss:wpaper:201405 is not listed on IDEAS
    19. 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.
    20. Patterson, Jacinta & Mugera, Amin & Burton, Michael, 2015. "Consumer Preferences for Welfare Friendly Production Methods: The Case of Chicken Production in Western Australia," 2015 Conference (59th), February 10-13, 2015, Rotorua, New Zealand 202567, Australian Agricultural and Resource Economics Society.
    21. Baba, Yasmina & Kallas, Zein & Realini, Carolina, 2015. "A multi-criteria stated method to analyze consumers’ preference and sensory evaluation towards omega-3 enriched eggs: The Analytical Hierarchy Process (AHP)," 2015 Conference, August 9-14, 2015, Milan, Italy 211190, International Association of Agricultural Economists.

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