Role of credence and health information in determining US consumers' willingness-to-pay for grass-finished beef

Wendy Umberger, Peter Boxall and R. Curt Lacy

Australian Journal of Agricultural and Resource Economics, 2009, vol. 53, issue 4, 603-623

Abstract: Consumer demand for forage- or grass-finished beef is rapidly emerging in the US. This research uses data elicited from consumer surveys and experimental auctions to provide insight on product attributes (taste/flavour, credence and nutritional characteristics) and socio-demographic factors that are most important in determining US consumers' preferences and willingness to pay premiums for grass-finished versus grain-finished beef. Information related to beef production processes increased the probability consumers would be willing to pay a premium for grass-fed beef. However, it appears that health-related messages are more important drivers of willingness-to-pay, on average, than the absence of antibiotics and supplemental hormones and traceability. Labelling information regarding grass-fed beef's nutritional content and related production processes is vital for maintaining and growing premium niche markets for grass-fed beef in the US. The relative size of the willingness to pay estimates compared to previous cost estimates suggest that the Australian beef industry may have a comparative advantage for finishing beef on forage and marketing premium grass-fed differentiated beef products in the US market. Copyright 2009 The Authors. Journal compilation 2009 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Asia Pty Ltd.

Date: 2009
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