Public Preferences and Private Choices: Effect of Altruism and Free Riding on Demand for Environmentally Certified Pork |
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Authors: | Jayson L Lusk Tomas Nilsson Ken Foster |
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Institution: | (1) Department of Agricultural Economics, Oklahoma State University, 411 Ag. Hall, OSU, Stillwater, OK 74078-6026, USA;(2) Department of Rural Economy, University of Alberta, Edmonton, Alberta, Canada;(3) Department of Agricultural Economics, Purdue University, West Lafayette, IN, USA |
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Abstract: | Sales of private goods with affiliated public good attributes have markedly risen in recent years. This fact is difficult
to explain within the paradigm of purely self-interested behavior. This paper investigates factors influencing consumer demand
for pork products with certifications related to the environment, animal welfare, and antibiotics. Using psychometric scaling
techniques, we measure individuals’ degree of altruism and propensity toward free riding. Results of a random parameter logit
model applied to choice data obtained from a nationwide survey in the United States indicates that more altruistic individuals
are willing to pay more for pork products with public good attributes than less altruistic individuals and free riders. These
results indicate that private purchases of goods with public-good attributes are not simply a result of individuals’ perceptions
of the ability to mitigate private risks such as food safety, but that individuals are making private choices to affect public
outcomes. Results have implications for policy makers weighing the relative costs and benefits of food labeling policies versus
bans related to certain livestock production practices. |
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