U.S. Consumer Preference and Willingness-to-Pay for Domestic Corn-Fed Beef Versus International Grass-Fed Beef Measured Through an Experimental Auction

Document Type

Article

Journal/Book Title/Conference

Agribusiness An International Journal

Volume

18

Issue

4

Publication Date

2002

First Page

491

Last Page

504

Abstract

Experimental auction procedures were used to measure Chicago and San Francisco consumers' willingness‐to‐pay for beef flavor from domestic, corn‐fed beef versus Argentine, grass‐fed beef. Based on taste panel rankings and bid differentials between paired steak samples, consumers were grouped into one of three beef‐preference categories: corn‐fed beef preferring, grass‐fed beef preferring, and indifferent. A multinomial logit model and regression analysis were used to identify consumers who prefer a particular flavor of beef. On average, consumers were willing to pay a 30.6% premium for corn‐fed beef. Sixty‐two percent of the participants were willing to pay an average premium of $1.61 more per pound for the corn‐fed beef, 23% of the consumers were willing to pay a premium of $1.36 more per pound for the grass‐fed beef, only 15% of the consumers were indifferent. The results have important implications for country‐of‐origin labeling of beef products, as well as niche marketing of corn‐fed and grass‐fed beef.

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