What question did this study set out to answer?

The aim is to assess consumers' willingness to pay for different types of U.S. beef compared to other beef alternatives.

May 1, 2003

European Consumers' Willingness to Pay for U.S. Beef in Experimental Auction Markets

Key Points

The aim is to assess consumers' willingness to pay for different types of U.S. beef compared to other beef alternatives.
Conducted four simultaneous second-price auctions
Evaluated preferences for Irish, Norwegian, U.S. hormone-free, and U.S. hormone-treated beef
Collected data on bid amounts to determine willingness to pay distribution
Most participants preferred domestic beef over imported beef
Half of the participants preferred Irish beef over U.S. hormone-free beef
Hormone-treated beef had the lowest mean bid, yet 28% of participants preferred it to U.S. hormone-free beef

Abstract

Consumers' willingness to pay for Irish, Norwegian, U.S. hormone‐free, and U.S. hormone‐treated beef was studied in an experimental auction market. We ran four simultaneous second‐price auctions to elicit efficiently the complete distribution of willingness to pay differences among our four alternatives. Most participants preferred domestic to imported beef, and half the participants preferred Irish to U.S. hormone‐free beef. Hormone‐treated beef received the lowest mean bid, but 28% of the participants were indifferent or preferred U.S. hormone‐treated to U.S. hormone‐free beef.

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