The Potential for Marketing Pork Products with Embedded Environmental Attributes: Results from an Experimental Study

Environmental issues such as air and water quality related to livestock production currently receive much attention. Potential methods for environmental improvement range from regulation to market solutions. This study looks at consumer willingness to pay for pork products with embedded environmental attributes. Experimental auctions showed that over one-half of the participants (62%) paid a premium, that did not vary significantly between differing regions of the United States. (JEL Codes Q13, Q25) Copyright 1999 by Sean P. Hurley and James B. Kliebenstein. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. Introduction Environmental issues related to livestock production have received much attention. These include surface and ground water quality and livestock odors. A standard way of dealing with non-point source pollution from livestock production has been to encourage the use of best management practices (BMP). While this approach may improve the environment, economic incentives for farmers to adopt these practices are needed as well. Recently there has been a rise in interest for organic agriculture. The importance of organic agriculture stems from the perceived attributes embedded within organic products. Klonsky and Tourte identify an existing perception that organic agriculture provides solutions to problems related to environmental quality, food safety, the viability of rural communities, and market concentration. Hence, organic farming has the perception of a market which provides incentives to farmers to follow good environmental production practices. Due to this rise in interest of organic agriculture, issues such as willingness-to-pay for organic produce (Misra et al.) and marketing organic products (Thompson and Kidwell; Thompson; Lohr; Krissoff; Duram) have received increased attention. While premiums are being paid for organic agriculture (Dobbs), it is difficult to know which attributes within organic products are commanding these premiums. There have been many studies that have investigated one of the perceived attributes, the issues of food safety (Roosen et al.; Fox et al., 1994; Fox et al., 1995), but little has been done in the area of embedded environmental attributes with no physical or health attributes. This paper presents results from measuring what pork consumers indicate an improved (sustainable) environment is worth to them. Participants included urban and