Abstract
AbstractWe investigate whether consumers are willing to pay a premium price for animal welfare attributes of foods they eat. To answer this question, we carry out a hedonic analysis of the retail eggs prices in Croatia. Scientific evidence clearly supports the notion that birds' wellbeing is higher in cage‐free systems than in a typical cage system. Therefore, there is a clear link between production systems and animal welfare. We use the retail level monthly data for 2017 on sales quantities and unit values of all fresh egg stock keeping units from all stores belonging to one of the largest retail chains in the country. The estimation results of the equilibrium hedonic price equation model shows that holding other attributes constant, the clean price premium for cage‐free eggs is 15 cents per 10‐egg carton or 7.8% of the retail price. Although the implicit price premium for cage‐free eggs is relatively modest, there are not that many people actually willing to buy them. Because only 2.2% of all eggs sold by the retail chain were actually cage‐free, the average per‐person willingness to pay for cage‐free eggs is only 0.3 cents for a 10‐egg carton [EconLit Citations: D12, L66, M31].
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