Consumer willingness-to-pay for antibiotic claims in ground beef with the implementation of a ban on the use of antibiotics for growth promotion in feed
Date
2019
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
University of Delaware
Abstract
There were two main purposes of antibiotics use on farm animals, 1) for growth promotion or improve feed efficiency and 2) prevent or control diseases. The wide use of antibiotics has led to consumers’ concerns about antibiotic resistance and antibiotic residues. Partially in response to this, the FDA banned the use of non- therapeutic antibiotics on farm animals in 2017. This means antibiotics can no longer be used for growth promotion but can still be used to prevent diseases. Previous studies have shown that consumers have a willingness to pay (WTP) premiums for certain antibiotic claims such as ‘Antibiotics Free’ or ‘Certified Antibiotics Use’. By using the regulation changes, there were three main objectives of this thesis: 1) determine consumers’ knowledge about the new ban; 2) examine if different pieces of information about antibiotics use would affect consumers’ WTP and 3) determine the factors that may affect WTP. ☐ This study was a field experiment conducted at three popular local grocery stores in northern Delaware, using the BDM mechanism to elicit consumers’ WTP for ground beef with different versions of labels. The labels were: ‘No Production Labeling’, ‘Certified Responsible Antibiotics Use,’ ‘Raised without Antibiotics,’ ‘USDA Organic,’ ‘Grass Fed’ and ‘Certified Grass Fed’. There were three treatment groups with three pieces of information explaining the ban, the ban plus noting antibiotics can still be used for disease control, and the rules about antibiotic residues, respectively. ☐ For the first objective, by collecting and comparing the answers of the questions regarding antibiotic regulation, it was suggested most consumers were not aware of the new ban on antibiotics for growth promotion. Thus, governmental education would be needed in this case. For the influence of the information, t-tests were used to test if WTPs changed or not after reading the information sheets. However, results were mixed in this case: premiums for the ‘Certified Responsible Antibiotics Use’ label fell significantly after information in two treatments and WTP for ‘USDA Organic’ also declined in one treatment. But there were no significant changes on values on ‘Raised without Antibiotics’ ground beef. This suggests a market demand for no-antibiotic products. Additionally, Tobit model results suggested that treatment did not explain second round WTP. For the third objective, again, another set of Tobit models for WTP differences were used to investigate the relationships between WTP changes and predictors. The results showed that the awareness of the new ban could explain consumers’ WTP changes on different ground beef labels.