The Impact of Animal Welfare Regulation on Consumer Demand and Welfare

Project: Research project

Project Details

Description

The Impact of Animal Welfare Regulation on Consumer Demand and Welfare The Impact of Animal Welfare Regulation on Consumer Demand and Welfare In this research, we intend to determine the willingness-to-pay (WTP) for cage free eggs in a representative sample of Canadian egg consumers, to illicit the impact on production costs from complying with proposed housing regulations, and the associated loss (or gain) in value ("consumer surplus" in economics terminology) of regulating egg production. We will estimate these effects in aggregate, and with respect to specific demographic and socioeconomic segments of the market. The subject sample will consist of 200 individuals randomly selected from the general population that have identified themselves as consumers of eggs. This sample will be divided into 20 groups of 10, and the order in which they bid on products (control or intervention) will be varied randomly in order to minimize any bias that may arise from the order in which the goods are presented. In this experiment, we will provide each participant with a certain amount of money at the outset ($50.00) which they can use throughout the process as they see fit. Each participant will be endowed with a dozen Grade A eggs containing a generic label. The participants will then be asked what they would bid to "up-grade" to a dozen Grade A cage free eggs produced under a similar brand name. All bids for each round will be entered into the z-Tree computer software and the computer will determine the winner of that round. The specific auction style to be used is a second-price (Vickrey) auction in which the winner (the highest bidder) obtains the item under auction and the price he or she pays is the second-highest price bid. All bidders who offer this price, or higher, receive the item to be auctioned. This auction format is well-understood to be demand-revealing, which means that bidders have an incentive to offer exactly what the item is actually worth to them. At the end of ten such auctions (for ten different products for each group of participants), we will draw one of the auctions at random and the items bid on during that auction will be exchanged for cash. Participants will be informed that they can keep all of the $50.00 that they do not spend on the goods in the experiment.F5
StatusFinished
Effective start/end date4/1/103/31/11

Funding

  • OTHER: Foreign University: $25,373.00

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