IDEAS home Printed from https://ideas.repec.org/a/wly/agribz/v36y2020i4p613-630.html
   My bibliography  Save this article

Paying for animal welfare? A hedonic analysis of egg prices

Author

Listed:
  • Tomislav Vukina
  • Danijel Nestic

Abstract

We investigate whether consumers are willing to pay a premium price for animal welfare attributes of foods they eat. To answer this question, we carry out a hedonic analysis of the retail eggs prices in Croatia. Scientific evidence clearly supports the notion that birds' wellbeing is higher in cage‐free systems than in a typical cage system. Therefore, there is a clear link between production systems and animal welfare. We use the retail level monthly data for 2017 on sales quantities and unit values of all fresh egg stock keeping units from all stores belonging to one of the largest retail chains in the country. The estimation results of the equilibrium hedonic price equation model shows that holding other attributes constant, the clean price premium for cage‐free eggs is 15 cents per 10‐egg carton or 7.8% of the retail price. Although the implicit price premium for cage‐free eggs is relatively modest, there are not that many people actually willing to buy them. Because only 2.2% of all eggs sold by the retail chain were actually cage‐free, the average per‐person willingness to pay for cage‐free eggs is only 0.3 cents for a 10‐egg carton [EconLit Citations: D12, L66, M31].

Suggested Citation

  • Tomislav Vukina & Danijel Nestic, 2020. "Paying for animal welfare? A hedonic analysis of egg prices," Agribusiness, John Wiley & Sons, Ltd., vol. 36(4), pages 613-630, October.
    • Handle: RePEc:wly:agribz:v:36:y:2020:i:4:p:613-630
    DOI: 10.1002/agr.21658
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/agr.21658
    Download Restriction: no
    File URL: https://libkey.io/10.1002/agr.21658?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Allender, William J. & Richards, Timothy J., 2010. "Consumer Impact of Animal Welfare Regulation in the California Poultry Industry," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(3), pages 1-19, December.
    2. Jayson L. Lusk & F. Bailey Norwood, 2011. "Animal Welfare Economics," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(4), pages 463-483.
    3. Conner Mullally & Jayson L Lusk, 2018. "The Impact of Farm Animal Housing Restrictions on Egg Prices, Consumer Welfare, and Production in California," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(3), pages 649-669.
    4. 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), pages 1-17.
    5. Timothy C. Haab & Kenneth E. McConnell, 2002. "Valuing Environmental and Natural Resources," Books, Edward Elgar Publishing, number 2427.
    6. Alberto Abadie & Susan Athey & Guido W Imbens & Jeffrey M Wooldridge, 2023. "When Should You Adjust Standard Errors for Clustering?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(1), pages 1-35.
    7. Karipidis, Philippos I. & Tsakiridou, Efthimia & Tabakis, Nikolaos M. & Mattas, Konstadinos, 2005. "Hedonic Analysis of Retail Egg Prices," Journal of Food Distribution Research, Food Distribution Research Society, vol. 36(3), pages 1-6, November.
    8. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    9. Francesca Gerini & Frode Alfnes & Alexander Schjøll, 2016. "Organic- and Animal Welfare-labelled Eggs: Competing for the Same Consumers?," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(2), pages 471-490, June.
    10. Norwood, F. Bailey & Lusk, Jayson L., 2011. "Compassion, by the Pound: The Economics of Farm Animal Welfare," OUP Catalogue, Oxford University Press, number 9780199551163.
    11. Patrick Bajari & Matthew E. Kahn, 2005. "Estimating Housing Demand With an Application to Explaining Racial Segregation in Cities," Journal of Business & Economic Statistics, American Statistical Association, vol. 23, pages 20-33, January.
    12. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-475, June.
    13. Chang, Jae Bong & Lusk, Jayson L. & Norwood, F. Bailey, 2010. "The Price of Happy Hens: A Hedonic Analysis of Retail Egg Prices," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(3), pages 1-18, December.
    14. Timothy Richards & William Allender & Di Fang, 2013. "Media Advertising And Ballot Initiatives: The Case Of Animal Welfare Regulation," Contemporary Economic Policy, Western Economic Association International, vol. 31(1), pages 145-162, January.
    15. Norwood, F. Bailey & Lusk, Jayson L., 2009. "The Farm Animal Welfare Debate," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 24(3), pages 1-7.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sohae Eve Oh & Tomislav Vukina, 2022. "The price of cage‐free eggs: Social cost of Proposition 12 in California," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(4), pages 1293-1326, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oh, Sohae & Vukina, Tomislav, 2020. "Quantifying the Welfare Effects of Laying-hen Cage Ban," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304408, Agricultural and Applied Economics Association.
    2. Paul, Andrew S. & Lusk, Jayson L. & Norwood, F. Bailey & Tonsor, Glynn T., 2019. "An experiment on the vote-buy gap with application to cage-free eggs," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 79(C), pages 102-109.
    3. Steven S. Vickner, 2015. "Estimating the Implicit Price of Convenience: A Hedonic Analysis of the US Breakfast Sausage Market," Agribusiness, John Wiley & Sons, Ltd., vol. 31(2), pages 281-292, April.
    4. Sohae Eve Oh & Tomislav Vukina, 2022. "The price of cage‐free eggs: Social cost of Proposition 12 in California," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(4), pages 1293-1326, August.
    5. Colin A. Carter & K. Aleks Schaefer & Daniel Scheitrum, 2021. "Piecemeal Farm Regulation and the U.S. Commerce Clause," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(3), pages 1141-1163, May.
    6. Faical Akaichi & Klaus Glenk & Cesar Revoredo‐Giha, 2022. "Bundling food labels: What role could the labels “Organic,” “Local” and “Low Fat” play in fostering the demand for animal‐friendly meat," Agribusiness, John Wiley & Sons, Ltd., vol. 38(2), pages 349-370, April.
    7. Lai, Yufeng & Boaitey, Albert & Minegishi, Kota, 2022. "Behind the veil: Social desirability bias and animal welfare ballot initiatives," Food Policy, Elsevier, vol. 106(C).
    8. Ufer, Danielle, 2022. "State Policies for Farm Animal Welfare in Production Practices of U.S. Livestock and Poultry Industries: An Overview," USDA Miscellaneous 333544, United States Department of Agriculture.
    9. Malone, Trey & Lusk, Jayson L., 2016. "Putting the Chicken Before the Egg Price: An Ex Post Analysis of California's Battery Cage Ban," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-15, September.
    10. Lusk, Jayson L. & Crespi, John M. & McFadden, Brandon R. & Cherry, J. Bradley C. & Martin, Laura & Bruce, Amanda, 2016. "Neural antecedents of a random utility model," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PA), pages 93-103.
    11. Jayson Lusk, 2011. "The market for animal welfare," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 28(4), pages 561-575, December.
    12. Szilvia Molnár & László Szőllősi, 2020. "Sustainability and Quality Aspects of Different Table Egg Production Systems: A Literature Review," Sustainability, MDPI, vol. 12(19), pages 1-22, September.
    13. Empen, Janine, 2011. "Preissetzung Auf Dem Deutschen Joghurtmarkt: Eine Hedonische Analyse," 51st Annual Conference, Halle, Germany, September 28-30, 2011 115362, German Association of Agricultural Economists (GEWISOLA).
    14. Ochs, Dan & Wolf, Christopher A. & Widmar, Nicole Olynk & Bir, Courtney & Lai, John, 2019. "Hen housing system information effects on U.S. egg demand," Food Policy, Elsevier, vol. 87(C), pages 1-1.
    15. Andrea Baranzini & Caroline Schaerer & José V. Ramirez & Philippe Thalmann, 2008. "Do Foreigners Pay Higher Rents for the Same Quality of Housing in Geneva and Zurich?," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 144(IV), pages 703-730, December.
    16. Mergenthaler, Marcus & Schröter, Iris, 2020. "Institutionelle Grenzen und Perspektiven bei der ökonomischen Bewertung und der Bereitstellung von Tierwohl," 60th Annual Conference, Halle/ Saale, Germany, September 23-25, 2020 305598, German Association of Agricultural Economists (GEWISOLA).
    17. Smithson, Katie & Corbin, Max & Lusk, Jayson L. & Norwood, F. Bailey, 2014. "Predicting State-Wide Votes on Ballot Initiatives to Ban Battery Cages and Gestation Crates," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 46(1), pages 107-124, February.
    18. 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.
    19. Asche, Frank & Bronnmann, Julia & Cojocaru, Andreea L., 2021. "The value of responsibly farmed fish: A hedonic price study of ASC-certified whitefish," Ecological Economics, Elsevier, vol. 188(C).
    20. Francisco Alex J. & Bruce Amanda S. & Crespi John M. & Lusk Jayson L. & McFadden Brandon & Bruce Jared M. & Aupperle Robin L. & Lim Seung-Lark, 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.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:36:y:2020:i:4:p:613-630. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.