We often hear that consumers want more information about their food, such as the livestock-production practices behind a package of meat or dairy products in the grocery case. But an important question is how much information they really want, and if they are willing to pay for it. Process verification adds costs, as can the production practices consumers think they want.
With regards to animal-welfare attributes, economists Glynn Tonser from Kansas state University and Christopher Wolf from Michigan State University recently completed a large study to assess consumer perceptions of animal welfare and their desire for labeling of animal-welfare information on food products.
The researchers surveyed 2,000 consumers in the fall of 2008, providing a sample consistent with U.S. demographics. In their report, Tonser and Wolf note that the U.S. livestock industry is facing unprecedented pressure over concerns regarding how modern livestock production practices, particularly the use of gestation stalls by swine producers and of laying hen cages by egg producers.
The researchers note that mandatory animal-welfare labeling potentially could:
- Reduce consumer uncertainty regarding the production practices used in rearing farm animals.
- Reduce search costs of consumers valuing different provisions of farm animal care.
- Convey more complete information to livestock producers regarding consumer demand for alternative provisions of farm animal care.
In the survey, when initially asked, 61.7 percent of respondents indicated they would be in favor of mandatory labeling of pork produced on farms using gestation crates/stalls, while 62.0 percent gave similar responses regarding eggs produced using laying hen cages.
Based on responses to subsequent survey questions, the researchers estimate the typical U.S. resident is willing to pay about 20 percent higher prices for pork and egg products in exchange for mandatory labeling information conveying the use, or non-use, of gestation crates or laying hen cages. They note that the estimate is prone to what economists call “hypothetical bias,” meaning consumers might overstate what they would pay on a survey compared to what they actually would pay in the store. With that in mind, they consider the 20 percent figure the upper boundary of what consumers would pay for the labeling.
The researchers note that much more needs to be learned and numerous questions remain unanswered regarding consumer perceptions of animal welfare and appropriate regulatory standards. In their report, they note these points:
- A thorough benefit-cost assessment is needed.
- Alternative voluntary labeling schemes also warrant consideration.
- Mandatory labeling may not enhance consumer choice.
- Food label information overload must be considered.
- Disconnects between frequent meat consumers and advocates for production practice bans must be delineated.
- Development of a composite animal welfare index would be a valuable contribution.
For links to the full report and videos outlining the results, visit K-State’s AgManager Web site.