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The Price of Happy Hens: A Hedonic Analysis of Retail Egg Prices

By Jae Bong Chang, Jayson L. Lusk and F. Bailey Norwood

Abstract

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.animal welfare, cage-free, eggs, free-range, hedonic, organic, Demand and Price Analysis, Livestock Production/Industries,

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