Valuing the Organic Attribute in Chicken Meat: Correcting for Endogeneity

Overall, chicken consumption has increased substantially in recent decades due to farming and processing intensification as well as the consumer perception of its benefits. Although organic chicken is perceived to taste better, support higher animal welfare and have benefits for the environment, it is unclear to what extent the organic attribute in chicken carries a premium in the eyes of consumers. The purpose of this paper is to estimate this robustly. This is done by estimating a hedonic pricing model using a comprehensive dataset. The model's endogeneity is corrected using consumer characteristics as instruments. When making this correction, the value of the organic attribute is two to five times larger than without it (depending on the estimation method used). This leads to an average premium in relation to conventional chicken of 135% for the organic attribute in chicken.