Consumer willingness to pay for farm animal welfare in New Zealand

Abstract

Animal welfare and consumer willingness to pay for welfare attributes are subjects of recent concern the world over. As incremental gains in welfare become increasingly costly and food security concerns among the lower income deciles deepen, however, it is important to consider how much consumers value these credence characteristics. In this study consumer willingness to pay for farm animal welfare is estimated within the context of layer hens, using a hedonic analysis of egg prices. The data set is comprised of weekly scanner data for different SKUs of eggs, collected from major retail markets in New Zealand, and includes a range of egg attributes such as colour, size, packaging, brand label, and production method. The hedonic method investigates the price differentials for different features and their levels to infer the implicit value of the underlying characteristic. The objective is to ascertain as to how much of the price premium can be attributed to production method, which is one of the prime animal welfare concerns. Observations about differences in price premium across locations, if any, will be investigated further.