The Economics of Farm Animal Welfare and Consumer Choice Evidence from Australia

Transcription

1 The Economics of Farm Animal Welfare and Consumer Choice Evidence from Australia Wendy Umberger, Ph.D. Director and Professor, Global Food Studies, University of Adelaide Jill Windle and John Rolfe (UQ), Lenka Malek (Uni Adelaide), Sven Anders (Uni Alberta) AARES 2016, 60 th Annual Conference Hyatt Hotel, Canberra 2-5 February, 2016

2 Background Public concerns over the welfare of farm animals have intensified globally 2011 suspension of live cattle exports to Indonesia cases of unethical treatment of farm animals Renewed societal interest in where our food comes from and how it is produced Need to quantify the extent of farm animal welfare concerns and value in the Australian consumer market

3 Study sample and data collection Nationally representative sample of 1009 Australian meat buyers Surveyed Oct-Nov 2015 Recruited using online panel provider (Powerstats) Roy Morgan meat buyer data was used to set sample quotas for: Age Gender Location (spread across states & city vs. country areas) Final sample matched Roy Morgan sample on above factors + education level, respondent income and employment.

4 Consumer attitudes about welfare issues Agree Somewhat agree Neither agree nor disagree Somewhat disagree Disagree Australian livestock transportation standards negatively impact animal welfare and should be 23% 22% 44% 6% 5% Good animal welfare will cost more and put farmers out of business 9% 43% To improve farm animal welfare, we must be willing to pay a higher price for food 19% 27% 36% 8% I feel sufficiently informed about farm animal welfare 12% 37% 19% Antibiotics should be used when animals are sick 32% 28% 33% 3% 3% Vaccination in animals is important to prevent animal diseases 43% 29% 26% 1% The use of antibiotics in animals generates serious risks for human health 34% 25% 34% 5% 3% Good animal welfare will improve the taste of meat 26% 29% 33% 7% 5% Meat from animals raised with higher welfare standards is healthier for me 23% 27% 35% 6% 9% Farm animal welfare in Australia concerns me so much that it influences my food purchases 14% 20% 32% 23%

5 Consumer concerns Agree Somewhat agree Neither agree nor disagree Somewhat disagree Disagree I prefer to buy meat that has been produced locally/regionally 46% 25% 23% 3% 3% I am so concerned about the use of antibiotics in meat production that I have changed my meat consumption 27% 14% 33% I am so concerned about the use of hormones in meat production that I have changed my meat consumption 13% 26% 31% Eating meat products is risky to my health 5% 12% 26% 22% 35% I am satisfied with the eating quality of meat products 39% 33% 6% 5% I am satisfied with the food safety of meat products 33% 32% 21% 9% 5% I am concerned that meat production harms the environment (e.g. by increasing greenhouse gases) 14% 35% 24%

6 DCE Research Questions 1. Are there significant preferences for credence claims across meat types? 2. How does willingness to pay (WTP) for farm animal welfare (FAW) compare to the value placed on other credence attributes? 3. Do preferences for the credence claims differ across meat types? 4. Are preferences influenced by consumption frequency? 5. Are preferences influenced by socio-demographic variables?

7 DCE Elicitation Method DCE Part 4 of Survey Bayesian D-efficient experimental design generated 24 choice sets per meat type divided into 6 blocks of 4 choice sets Respondents randomly allocated to one of the four meat types (based on consumption frequency) Completed 4 choice sets in total Asked to select most likely choice out of 4 meat options and a no-choice option Choice scenario:

8 Meat cuts Mince Beef Chicken Pork Lamb Your Preferred Breast Thigh Loin Loin Beef Steak Leg Roast Leg Roast Fillets Fillets Chops Chops (Scotch or Porterhouse)

9 Meat Attributes & Levels Production method Farm Animal welfare status Organic status Other claims Other claims Cost per kg Beef & Lamb: Pasture-raised Chicken & Pork: Free Range Conventional Certified Humane None (blank space) Certified Organic None (blank space) Antibiotic Free None (blank space) No Added Hormones None (blank space) 4 levels per meat cut Credence claims

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11 Overview of DCE Analysis Error Component Logit (ECL) models estimated for total sample and for each meat separately ECL model is a variant of the mixed logit model Accounts for panel nature of data and unobserved heterogeneity between respondents across the different attributes and alternatives (meat cuts) Marginal willingness-to-pay (WTP) estimates calculated using mean parameter coefficients 95% confidence intervals estimated using Krinsky and Robb (1986) procedure Statistically significant differences between WTP estimates identified using Poe et al. (2005) procedure

12 Q1. Are there significant preferences for credence claims across meat types? Coefficient St error Randomised variables Price *** Meat Cut 0.418*** Production Method 0.490*** Certified Organic 0.439*** Certified Humane 0.525*** Antibiotic Free 0.412*** No Added Hormones 0.802*** Distribution of randomised variables Price 0.530*** Meat Cut 2.623*** Production Method 0.425*** Certified Organic 0.704*** Certified Humane 0.378*** Antibiotic Free 0.472*** No Added Hormones 0.510*** Non randomised variables ASC *** Chicken 3.753*** Pork Lamb Model statistics Observations (n) 4032 (1008) Log Likelihood Pseudo R-sqrd AIC Chi Sqrd 3834 SigmaE *** 0.801

13 Q2. Does WTP vary between farm animal welfare (FAW) and food safety attributes? WTP differences WTP (95%CI) Production Method $1.59 ( ) Certified Organic $1.43 ( ) Certified Humane $1.71 ( ) Antibiotic Free $1.34 ( ) No Added Hormones $2.61 ( ) No Added Hormones > all other claims (P<0.01) Certified Humane > Antibiotic Free (P<0.01) Production method not significantly different to other claims Certified Organic not significantly different to other claims apart from No Added Hormones

14 Q3. Do preferences for the five credence claims differ across meat types? Mean WTP (95% CI) Production method Organic Humane Antibiotic Free No Added Hormones Beef Chicken Pork Lamb $1.49 ($ $2.54) $1.76 ($ $2.84) $1.53 ($ $2.66) $1.49 ($ $2.57) $2.47 ($ $3.83) $1.45 ($ $2.28) $1.03 ($ $1.86) $0.98 ($ $1.77) $0.99 ($ $1.79) $1.79 ($ $2.81) $1.12 ($ $2.40) $0.75 ($ $1.80) $2.01 ($ $3.58) $1.35 ($ $2.64) $2.52 ($ $4.23) $0.80 ($ $1.70) $0.52 (-$ $1.51) $1.09 ($ $2.16) $0.52 (-$ $1.48) $1.72 ($ $2.91) WTP differences (P<0.05) Organic Beef > Organic Chicken, Pork or Lamb Free Range Chicken > Pasture Fed Lamb Humane Pork > Humane Chicken Antibiotic Free Beef > Antibiotic Free Lamb

15 Q5. Are preferences influenced by consumption frequency? Coding: 0 = cheaper cut, 1 = more expensive cut Consumption frequency categories: Daily, At least once per week, Fortnightly, Monthly, < Once per month, Never Converted to continuous variable for analysis No significant interactions in full sample model or beef model Chicken Pork Lamb Cut Breast Thigh Roast Chop Roast Chop Production method - +ve** ve* ve** - - Certified Organic ve** ve* Certified Humane ve*** - Antibiotic Free No Added Hormones

16 Q6. Are preferences for the credence claims influenced by socio-demographic variables? Certified Humane Less likely to select than females 60+ No Added Hormones Less likely to select than younger respondents Higher than average income Certified Organic More likely to select than respondents with lower than average income Not significant (P>0.10) Retired, university education, age < 30 and < 50, metropolitan or urban area, primary shopper

17 Summary Presence of credence claims has a positive impact on choice Highest value for No Added Hormones Certified Humane is valued more than Antibiotic Free Values for credence attributes vary across species of meat Further work needed to understand implications

18 Thank you! Questions? Thank you!

19 Frequency of meat purchase 80% 70% 69% 60% 59% 50% 40% Beef Chicken Pork 30% 20% 26% 24% 28% 26% 23% 18% 22% 22% 19% 18% Lamb 0% 4% 2% 1% 1% Daily At least once a week 7% Fortnightly Monthly Less than once a Month 9% 6% 4% 1% 1% 0% Never

20 Frequency of at home meat preparation/consumption 70% 60% 58% 50% 50% 40% 38% 42% 42% 39% 40% Beef Chicken 30% 25% Pork Lamb 20% 0% 4% 12% 12% 9% 5% 6% 7% 6% 2% 1% 2% 1% >5 3 to 5 1 to 2 Less than 1 Never

21 Meat purchase locations Main Source Sometimes a Source (could select more than one option) Supermarket (e.g. Woolworths/Safeway, Coles, IGA/Foodland, etc.) 20% 78% Independent Butcher or Meat Shop 18% 62% Discount or Warehouse supermarket (e.g. Costco) 1.6% Farmer s Market 0.9% Ethnic market (e.g. Asian, Indian, etc.) 0.9% 4% Internet or Direct Mail Order 0.3% 2% Directly from Producer/Farmer 0.3% 3% Organic Market 0.1% 3% Specialty Health/Natural/Organic Retailer 0.1% 3%

22 Meat labelling information considered very/extremely important Best before/use by date Price Country of origin Colour Quantity/size of product No Added Hormones Antibiotic Free Type of cut Humanely Raised Fat content Production method (e.g. free range, pasture raised) Weight Ingredient list Feeding method (e.g. grass-fed, grain-fed) Ethical impact (e.g. working conditions, fair trade) Nutrition information panel Portion information (e.g. 2 servings per package) Health logo/symbol (e.g. Heart Smart Tick) Brand Environmental impact (e.g. production, transport) Organic status Health effect claim (e.g. lowers cholesterol) Cooking instructions Halal or Kosher 6% 21% 20% 20% 18% 16% 16% 16% 49% 46% 45% 43% 41% 39% 38% 37% 34% 31% 30% 30% 55% 60% 0% 20% 30% 40% 50% 60% 70%

23 Previous awareness and purchase of meat with credence claims Aware of claim Purchased meat with claim Organic 49% 90% Free Range 71% 94% Cage Free 60% 90% Certified Humane 18% 45% Antibiotic-Free 28% 56% No Added Hormones 53% 81% Pasture Raised 26% 54% Grass-Fed / Grass-Finished Grain-Fed / Grain-Finished 42% 42% 73% 74% Quality Guarantee: Meat Standards Australia 44% 66% Grown in Australia 63% 82% RSPCA Approved Farming 51% 77%

24 Consumer attitudes (moral value based Qs) Agree Somewhat agree Neither agree nor disagree Somewhat disagree Disagree The idea that meat comes from an animal gives me an uneasy feeling 7% 21% 52% Eating meat makes me feel ashamed 5% 7% 19% 60% I feel good about eating meat 38% 24% 31% 4% 3% Eating meat is offensive, repulsive or disgusting 4% 6% 18% 63% Humans have the right to use animals as they want 7% 26% 19% 36% Vaccination of humans is important 65% 16% 16% 2% 1% The needs of humans are more important than the needs of farm production animals 13% 20% 38% 14% 14% Farm animals should be protected for their own sake rather than to simply meet the needs of humans. 28% 29% 32% 8% 4% People exaggerate the feelings and sensitivity of farm animals 12% 20% 33% 21% Farm animals should have rights similar to the rights of humans 19% 22% 30% 18%

25 Consumer attitudes (moral value based Qs) Agree Somewhat agree Neither agree nor disagree Somewhat disagree Disagree I care about animal welfare but cannot find welfare friendly products where I shop for meat 9% 14% 54% 12% When eating, I don t like to think of meat as coming from live animals 37% 18% It s wrong to eat meat from animals that have not had a good life 42% 14% Farm animals can feel pain like a human being 48% 25% 21% 3% 2% I would refrain from eating meat if I knew the animals were kept inhumanely 25% 22% 34% I believe society has a moral obligation to promote farm animal welfare 32% 32% 28% 5% 4% I feel responsible for animals raised for their meat 36% 16% 21% I feel a strong emotional bond with farm animals 38% 16% 19% I care about farm animals as much as I do about other people 21% 20% 30% 16% 13% I don t care about farm animal welfare issues 4% 5% 21% 19% 51% Eating meat makes me feel guilty about animals being raised for their meat 8% 22% 49%

26 Believed to be a healthier choice No Added Hormones 36% Antibiotic Free 35% Organic 32% Grass-Fed 28% Free Range 24% Grown in Australia 22% Quality Guaranteed: Meat Standards Australia Certified Humane 16% Grain-Fed RSPCA Approved Farming Scheme 14% Cage Free 14% 0% 5% 20% 25% 30% 35% 40%

27 Certified Humane Perceptions Produced according to animal welfare standards 44% Allowing me to do something good Better for humans and society 29% 31% From a more trustworthy source Raised in a more sustainable manner 24% 24% Better for the environment Don t know A healthier choice None of the statements apply Guaranteed to be better quality No different than others, i.e. a marketing gimmick Safer less likely to make me or my family sick More tender Better value for money 18% 16% 14% 13% 12% 0% 5% 20% 25% 30% 35% 40% 45% 50%

28 RSPCA Approved Farming Scheme Perceptions Produced according to animal welfare standards 41% Allowing me to do something good 30% From a more trustworthy source Better for humans and society Raised in a more sustainable manner 22% 23% 25% Don t know 19% Safer less likely to make me or my family sick Better for the environment None of the statements apply A healthier choice Guaranteed to be better quality 16% 14% 13% No different than others, i.e. a marketing gimmick Better value for money More tender 7% 9% 0% 5% 20% 25% 30% 35% 40% 45%

29 No Added Hormones Perceptions A healthier choice Safer less likely to make me or my family sick 36% 35% Better for humans and society 29% Don t know Guaranteed to be better quality Better for the environment None of the statements apply 18% 18% 16% From a more trustworthy source No different than others i.e. a marketing gimmick Better value for money Allowing me to do something good Raised in a more sustainable manner Produced according to animal welfare standards More tender 13% 12% 9% 9% 8% 0% 5% 20% 25% 30% 35% 40%

30 Antibiotic Free Perceptions A healthier choice 35% Safer less likely to make me or my family sick 33% Better for humans and society 28% Don t know 20% Better for the environment Guaranteed to be better quality None of the statements apply 16% No different than others, i.e. a marketing gimmick From a more trustworthy source Allowing me to do something good 12% 13% Raised in a more sustainable manner Better value for money Produced according to animal welfare standards More tender 9% 9% 9% 8% 0% 5% 20% 25% 30% 35% 40%

31 Organic Perceptions A healthier choice 32% Better for the environment 29% Better for humans and society Guaranteed to be better quality Safer less likely to make me or my family sick Raised in a more sustainable manner From a more trustworthy source 23% 23% 22% 21% 20% None of the statements apply No different than others, i.e. a marketing gimmick Don t know Allowing me to do something good More tender 14% Produced according to animal welfare standards Better value for money 0% 5% 20% 25% 30% 35%

32 Free Range Perceptions Raised in a more sustainable manner Produced according to animal welfare standards Allowing me to do something good Guaranteed to be better quality 31% 30% 30% 29% Better for humans and society Better for the environment A healthier choice More tender From a more trustworthy source 26% 25% 24% 22% 22% Better value for money Safer less likely to make me or my family sick None of the statements apply Don t know 18% 16% 14% No different than others, i.e. a marketing gimmick 12% 0% 5% 20% 25% 30% 35%

33 Cage Free Perceptions Allowing me to do something good Produced according to animal welfare standards 22% 22% Raised in a more sustainable manner None of the statements apply Don t know No different than others, i.e. a marketing gimmick Better for humans and society 19% 19% 19% A healthier choice Better for the environment 14% 14% Guaranteed to be better quality Better value for money From a more trustworthy source More tender 12% 12% Safer less likely to make me or my family sick 8% 0% 5% 20% 25%

34 Quality Guaranteed: Meat Standards Australia Perceptions Guaranteed to be better quality From a more trustworthy source 30% 30% Safer less likely to make me or my family sick 25% Don t know 21% Better for humans and society Produced according to animal welfare standards A healthier choice Better value for money More tender None of the statements apply Raised in a more sustainable manner 19% 18% 14% Allowing me to do something good No different than others, i.e. a marketing gimmick 12% Better for the environment 9% 0% 5% 20% 25% 30% 35%

35 Grass-Fed Perceptions A healthier choice 28% Don t know Guaranteed to be better quality Raised in a more sustainable manner More tender Better for the environment 23% 22% 21% 21% 21% Better for humans and society 19% None of the statements apply Better value for money Safer less likely to make me or my family sick 16% Allowing me to do something good No different than others, i.e. a marketing gimmick Produced according to animal welfare standards From a more trustworthy source 13% 12% 0% 5% 20% 25% 30%

36 Grain-Fed Perceptions Don t know 27% None of the statements apply 21% More tender Guaranteed to be better quality No different than others, i.e. a marketing gimmick A healthier choice Better for the environment Raised in a more sustainable manner Better value for money Better for humans and society Safer less likely to make me or my family sick 9% Allowing me to do something good Produced according to animal welfare standards 8% 7% From a more trustworthy source 6% 0% 5% 20% 25% 30%

37 Grown in Australia Perceptions From a more trustworthy source 33% Guaranteed to be better quality Allowing me to do something good Safer less likely to make me or my family sick 25% 25% 24% A healthier choice Better value for money Better for humans and society 21% 21% 22% Don t know Better for the environment 18% Raised in a more sustainable manner None of the statements apply Produced according to animal welfare standards 14% 14% More tender 12% No different than others, i.e. a marketing gimmick 9% 0% 5% 20% 25% 30% 35%