U.S. consumer preference and willingness-to-pay for domestic corn-fed beef versus international grass-fed beef measured through an experimental auction

Abstract

Experimental auction procedures were used to measure Chicago and San Francisco consumers' willingness-to-pay for beef flavor from domestic, corn-fed beef versus Argentine, grass-fed beef. Based on taste panel rankings and bid differentials between paired steak samples, consumers were grouped into one of three beef-preference categories: corn-fed beef preferring, grass-fed beef preferring, and indifferent. A multinomial logit model and regression analysis were used to identify consumers who prefer a particular flavor of beef. On average, consumers were willing to pay a 30.6% premium for corn-fed beef. Sixty-two percent of the participants were willing to pay an average premium of $1.61 more per pound for the corn-fed beef, 23% of the consumers were willing to pay a premium of $1.36 more per pound for the grass-fed beef, only 15% of the consumers were indifferent. The results have important implications for country-of-origin labeling of beef products, as well as niche marketing of corn-fed and grass-fed beef.