Public Preferences and Private Choices: Effect of Altruism and Free Riding on Demand for Environmentally Certified Pork

• Published in: Environmental & resource economics Vol. 36; no. 4; pp. 499 - 521
• Main Authors: Lusk, Jayson L, Nilsson, Tomas, Foster, Ken
• Format: Journal Article
• Language: English
• Published: Dordrecht Dordrecht : Kluwer Academic Publishers 01-04-2007; European Association of Environmental and Resource Economists; Springer Nature B.V
• Series: Environmental & Resource Economics
• Subjects: Agricultural economics; Altruism; Animal rights; Animal welfare; Antibiotics; Bans; Choice of products; Consumer behavior; Consumer preferences; Consumption; Descriptive labeling; Economic theory; Environmental certification; Externality; Food labeling; Food safety; Free riding; Livestock; Livestock production; Meat products; Pork; Public good; Public goods; Studies; U.S.A; Willingness to pay; United States > US; USA
• ISSN: 0924-6460; 1573-1502
• DOI: 10.1007/s10640-006-9039-6

Sales of private goods with affiliated public good attributes have markedly risen in recent years. This fact is difficult to explain within the paradigm of purely self-interested behavior. This paper investigates factors influencing consumer demand for pork products with certifications related to the environment, animal welfare, and antibiotics. Using psychometric scaling techniques, we measure individuals' degree of altruism and propensity toward free riding. Results of a random parameter logit model applied to choice data obtained from a nationwide survey in the United States indicates that more altruistic individuals are willing to pay more for pork products with public good attributes than less altruistic individuals and free riders. These results indicate that private purchases of goods with public-good attributes are not simply a result of individuals' perceptions of the ability to mitigate private risks such as food safety, but that individuals are making private choices to affect public outcomes. Results have implications for policy makers weighing the relative costs and benefits of food labeling policies versus bans related to certain livestock production practices.