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Can consumers’ willingness to pay incentivize adoption of environmental impact reducing technologies in meat animal production?

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  • White, Robin R.
  • Brady, Michael

Abstract

This study develops a model estimating consumer willingness to pay (WTP) for environmental meat attributes and uses a multi-objective nutritional optimizer to explore the extent to which WTP can offset on-farm costs of reducing water use. Data for the WTP model are sourced from a literature survey of the Agricola and Google Scholar databases yielding 46 studies estimating WTP for pure and impure (organic, grass-fed, natural) environmental meat attributes. Bayesian analysis is used to estimate 3 models varying in independent variables. Models are evaluated by the correlation coefficient (R2), root mean squared error of prediction (RMSPE) and posterior model probability. The most probable model is then used to estimate a confidence range of WTP for pure environmental beef. Impure environmental labels result in higher WTP than pure labels. Non-hypothetical WTP for pure environmental labeling for North American consumers ranges from 6.7% to 32.6%. A case study is conducted to identify the expected reduction in water use that can be funded from capturing WTP through labeling. A multi-objective nutritional optimizer is used to identify ideal management of beef cattle to reduce whole-system water use in three regions of the United States. Cost increases from management are varied over the predicted range in WTP and combined with the probability of a consumer purchasing beef at each WTP value to identify the theoretical effect on expected environmental impact reduction. A 10% premium is the ideal WTP, resulting in water use reductions between 24.4L and 41.4L.

Suggested Citation

  • White, Robin R. & Brady, Michael, 2014. "Can consumers’ willingness to pay incentivize adoption of environmental impact reducing technologies in meat animal production?," Food Policy, Elsevier, vol. 49(P1), pages 41-49.
  • Handle: RePEc:eee:jfpoli:v:49:y:2014:i:p1:p:41-49
    DOI: 10.1016/j.foodpol.2014.06.007
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