Consumers show measurable willingness to pay for non-quality attributes of beef including reduced environmental impact, therefore according to researchers at Washington State University that is a factor that should be included in assessments of methods to improve sustainability of beef production.
R. White and M. Brady explained during JAM 2013 that the improved sustainability of beef production systems will help ensure a long-term food supply.
Sustainability of a system can be quantified via measures such as environmental impact (EI), economic viability and social acceptability. An accepted metric for social acceptability is consumer willingness to pay.
The researchers have performed a quantitative survey of consumer willingness to pay for various attributes of beef as a means to identifying consumer willingness to pay for a lowered environmental impact.
An Agricola database search for consumer willingness to pay for beef from 2003 to 2012 returned 16 usable studies representing 44 treatments applied to over 11,000 consumers in six countries. Following a Hedonic approach, breaking goods into constituent parts, studies were categorized using 21 binary dummy variables to describe study location, methodology and beef attribute.
For each variable, 95% confidence intervals were calculated to determine the expected mean and range of consumer willingness to pay. A multi-variate regression was used to relate consumer WTP to location and methodological variables, four single-attribute variables (health, local, EI or quality) and three dual-attribute variables (health+local, health+EI, local+EI).
Confidence intervals indicated consumer willingness to pay for beef attributes related to quality (tenderness, yield) or personal health (safety, traceability, no GMO, no antibiotics/hormones, vegetarian diet, organic) was between a 35% and 104% premium (mean = 51%). The willingness to pay for EI or local economic impact was a premium of 6% to 33% (mean = 20%).
The researchers said results agree with existing literature that consumers are willing to pay more for private goods than public goods. When location variables were used to predict consumers’ willingness to pay, the model indicated willingness to pay a 4% premium for environmental attributes. When products with environmental attributes also had local or health benefits, consumers’ willingness to pay increased to a 23% or 82% premium, respectively, the researchers reported.