The Price of Happy Hens: A Hedonic Analysis of Retail Egg Prices
By: Chang, Jae Bong; Lusk, Jayson L.; Norwood, F. Bailey
Chang, Jae Bong; Lusk, Jayson L.; Norwood, F. Bailey, The Price of Happy Hens: A Hedonic Analysis of Retail Egg Prices, Journal of Agricultural and Resource Economics, Volume 35, Issue 3, December 2010, Pages 406-423
This paper analyzes price differentials among conventional, cage-free, organic, and Omega-3 eggs using retail scanner data from two regional markets and the United States as a whole. Results reveal significant premiums attributable to cage-free (a 57% premium on average) and organic (an 85% premium on average). However, significant variation exists among geographic locations; price premiums for organic over conventional eggs in Dallas are almost twice as high as those in San Francisco. Estimates indicate that about 42% of the typically observed premium for cage-free eggs over conventional eggs (and 36% of the premium for organic eggs) can be attributed to egg color rather than differences in hens’ living conditions. Despite the large implicit price premiums for cage-free and organic, our data reveal that most shoppers are not willing to pay such high prices for cage-free and organic attributes.