Market Evidence of Packer Willingness to Pay for Traceability

Abstract

This article measures the willingness to pay for the traceability of steers. I use data on the price of steers in Quebec and Ontario to identify a demand shifter in a hedonic framework. I estimate error correction models to provide the first market‐based econometric estimates of the willingness to pay for traceability. My best assessment is that a premium between C.02 and C.05 per pound of carcass (between 1.2% and 3.1%) is paid for traceable steers.