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Demand for carbon-neutral food – evidence from a Discrete Choice Experiment for milk and apple juice

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  • Breustedt, Gunnar
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    To internalize climate-related external costs from agricultural production and food consumption Pigou taxes and carbon credits increase private costs for food. Voluntary consumer choices for carbon-neutral food can be advantageous over such policy measures since they avoid higher food prices for the poor. We empirically analyze consumers’ willingness-to-pay for hypothetical carbon-reduced as well as carbon-neutral milk and apple juice. Data are collected in Discrete Choice Experiments in a German supermarket. Estimates reveal a substantial price premium for the carbon-neutral products which is probably sufficient to cover the products’ extra costs, including the purchase of carbon credits. The premiums are around 0.20 € per liter milk and 0.30 € per liter apple juice. Although the external validity of stated-preference methods is limited the willingness-to-pay measures for organic milk and juice as well as for different real-world labels in our experiment are similar to real-world price premiums.

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    File URL: http://purl.umn.edu/169748
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    Paper provided by Agricultural Economics Society in its series 88th Annual Conference, April 9-11, 2014, AgroParisTech, Paris, France with number 169748.

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    Date of creation: Apr 2014
    Handle: RePEc:ags:aesc14:169748
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    1. Thomassen, M.A. & van Calker, K.J. & Smits, M.C.J. & Iepema, G.L. & de Boer, I.J.M., 2008. "Life cycle assessment of conventional and organic milk production in the Netherlands," Agricultural Systems, Elsevier, vol. 96(1-3), pages 95-107, March.
    2. Hausman, Jerry & McFadden, Daniel, 1984. "Specification Tests for the Multinomial Logit Model," Econometrica, Econometric Society, vol. 52(5), pages 1219-1240, September.
    3. Isabell Goldberg & Jutta Roosen, 2007. "Scope insensitivity in health risk reduction studies: A comparison of choice experiments and the contingent valuation method for valuing safer food," Journal of Risk and Uncertainty, Springer, vol. 34(2), pages 123-144, April.
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