Meta-Analysis of Consumer Willingness to Pay for Specialty Attributes of Beef Robin White and Mike Brady ASAS/ADSA Joint Annual Meeting Indianapolis, IN July 11th, 2013

Why Social Acceptability? Why Does Willingness to Pay Matter? Sustainability Why Social Acceptability? Freedom of operation can be impeded by consumer-supported legislation restricting management practices . Consumers “vote” with their pocket books. A consumer’s choice to purchase reflects a good’s acceptability This feeds back to retailers

Indicator-Based Approaches How is Social Acceptability Measured? Indicator-Based Approaches Conceptual Framework Internal Acceptability Input Self Sufficiency Equality Risk and Uncertainty Labor Conditions Health Gender Equality Educational Opportunity Worker Welfare Mandates Profitability Costs Revenue Supply Demand External Acceptability Food Security Diversity of Food Supply Socially Acceptable Practices Freedom of Operation Consumer Willingness to Pay Legislative and Monetary Societal Acceptance

Developing Estimates of Willingness to Pay Objective To quantitatively summarize previous estimates of consumer willingness to pay for beef attributes to specifically identify willingness to pay for low-environmental impact beef Hypothesis Beef products with private good attributes (taste/quality, personal health/safety) would have greater WTP Beef products with public good attributes (local or environmental) would have comparatively lower WTP

Data Collection and Coding Literature Selection AGRICOLA Database Search: Consumer Willingness to Pay Beef Exclusion Criteria Excluded for Failure to Present Numerical Willingness to Pay Variable Coding Location Elicitation Method Population

Data Analysis Regression Analysis 95% Confidence Intervals Environmental, Healthy/Safe Products Healthy/Safe Products High Quality Products Ideally Sized Yield Safety Certified No Hormones Tenderness/Taste Healthy No Antibiotics Local Environmental No GM Feed Local Products Environmental Products Small Farm Traceable Vegetarian Diet Grass-Fed Environmental, Local Products Local, Healthy/Safe Products Organic

The Derived Dataset Study Collection Location Breakdown 16 Studies 44 Treatments Study Focus Breakdown 11,000 Consumers 6 Countries H = Healthy, Env = Environmental, L = Local

Participant & Methodology Results: Basic Confidence Intervals Location Participant & Methodology Consumer Willingness to Pay (% Premium) Shopper In-Person Non-Hypothetical

Results: Beef Attribute Confidence Intervals Beef Attributes Consumer Willingness to Pay (% Premium)

Results: Regression Analysis Model Statistics Regression Outputs R2 = 67.2% Overall P = 0.0003 Consumer Willingness to Pay (% Premium)

What are the Implications for Sustainability?

Summary and Conclusions 1. 16 studies representing 44 treatments and 11,000 consumers were identified 2. 95% Confidence Intervals indicated higher willingness to pay for private goods than for public goods. 3. Consumers were predicted to pay 4% premiums for “environmental” beef 4. Consumers were predicted to pay 23% premiums for “environmental, healthy/safe” beef 5. Consumers were predicted to pay 82% premiums for “environmental, local ” beef

Supplementary Detail Authors Location Sample Type Method Hyp. Treatment WTP (%) Angulo and Gil (2007) Spain R.S. Telephone Survey Yes Safety Certified 5.0 Belcher et al. (2007) Canada Mail Survey Environmental 13.8 Beriain et al. (2009) In person survey Healthy 8.3 Chung et al. (2009) Korea Shoppers In Person Survey Marbling 21.2 Fresh 20.6 No Antibiotics 22.9 No GMO Fingerhut et al. (2001) US Shopper Steam Pasteurized 84.1   Irradiated 72.5 Froehlich et al. (2009) Experiment No Prairie Prime 14.1 TenderGrill 15.5 Natures Diamond 15.4 Original Angus Control 13.2

Supplementary Detail Authors Location Sample Type Method Hyp. Treatment WTP (%) Herring et al. (2007) US Shoppers In Person Survey Yes Farm Raised 17.3 Loureiro and Umberger (2006) R.S. Mail Survey Traceable 28.1 Safe 119.5 Tender 14.1 Cool Labeled 38.0 Lusk et al. (2003) France No hormones 116.9 No GMO feed 116.8 Germany 85.8 90.2 UK 86.9 74.2 95.5 38.9 Napolitano et al. (2010) Italy Experiment No Organic 49.8

What are the Implications for Sustainability? Authors Location Sample Type Method Hyp. Treatment WTP (%) Platter et al. (2005) US R.S. Experiment No Prime 46.0 Sweeter et al. (2005) Large 7.6 Thilmany et al. (2003) Mail Survey Yes Natural 24.0 Tonsor et al. (2009b) Canada Tender 58.0   40% Safety 29.8 80% Safety 45.6 Japan 213.7 30.4 293.9 Mexico 59.7 14.6 73.9 44.9 17.2 -9.8

What are the Implications for Sustainability? Authors Location Sample Type Method Hyp. Treatment WTP (%) Umberger et al. (2009b) US R.S. Telephone Survey Yes Natural Ribeye 10.0 Natural Ground Beef 28.0 Natural Pre-cooked 5.0 Umberger et al. (2009a) Experiment No Production 0.8   Production, health 13.2