How do U.S. and Canadian consumers value credence attributes associated with beef labels after the North American BSE crisis of 2003?

Abstract

AbstractA consumer survey conducted in 2006 (n = 419), and therefore after the first confirmed bovine spongiform encephalopathy (BSE) cases in North America in 2003, employs attribute‐based choice experiments for a cross‐country comparison of consumers' valuation of credence attributes associated with beef steak labels; specifically a guarantee that beef was tested for BSE, a guarantee that the steaks were produced without genetically modified organisms (GMOs) and a guarantee that beef steaks were produced without growth hormones and antibiotics. Considering consumers' socio‐economic characteristics, the results suggest that consumers in Montana (U.S.) and Alberta (Canada) are significantly heterogeneous in their valuation of the above attributes, although consumers' relative valuation of these process attributes does not appear to have changed since the 2003 BSE crisis in each region. Alberta consumers place a significant valuation on beef tested for BSE, which is striking because Canada's current legal environment does not permit testing and labelling of such beef by private industry participants. Montana consumers' valuation was found highest for a guarantee that the steaks were produced without GMO. Effective supply‐chain responses to consumers' valuation of credence attributes, for example, in the form of labelling, should therefore take consumers' heterogeneity into account.