Consumer valuation of safety‐labeled free‐range chicken: results of a field experiment in Hanoi

Abstract

AbstractThis article presents results of a field experiment designed to assess willingness to pay for safely produced free‐range chicken in Hanoi, the capital of Vietnam. Improved safety of chicken production and trading is suggested as an important component of avian influenza control strategy, which aims to address the direct costs of avian influenza as well as the global public health externality. However, consumer demand for safely produced free‐range chicken is unknown. Products that have credible food labeling are not common in traditional markets where the majority of free‐range chicken is purchased. Valuing characteristics of products sold in informal markets is a major challenge that our experiment overcomes. As part of the experiment, we provided several vendors from these markets with safety‐labeled free‐range chicken. Consumer valuation of safety labeling was elicited through having experiment participants, who were representative of potential consumers, select between discount coupons for either safety‐labeled chicken or regular chicken. Results indicate that consumers will pay at least $0.50, or a 10–15% premium, per chicken purchase for safety labeling, which emphasizes safe production, processing, and transport conditions. This premium is smaller than the premium currently paid for traditional chicken varieties that are considered to be tastier. Consumers with more education have higher valuation of safety labeling. Hence, safety labeling for high‐quality free‐range chicken can play a role in controlling livestock disease and improving public health.