Consumers’ willingness to pay for food quality – The case of eggs

The aim of this paper is to introduce an approach to estimating the marginal willingness to pay (WTP) for food quality and safety using data on actual consumer purchases. Marginal WTP for specific food product varieties can be derived from estimated demand functions by inverting the relations, thereby expressing the prices consumers are willing to pay as functions of quantity demanded. The task addressed in the paper is isolation of the WTP for quality attributes embedded in the varieties. Two models based on the AIDS-specification are proposed and discussed. To illustrate the applicability of the models, the case of five varieties of eggs is presented. It is found that Danish consumers are willing to pay a relatively high premium for improved animal welfare and organic production methods and somewhat less for food safety.

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