Animal Welfare Labels and Consumer Demand

Abstract

Consumers are increasingly expressing their concerns over animal welfare standards in agricultural food production. However, little is known on whether consumers would actually change their purchase behavior if presented with accurate information on the conditions under which animals are raised. This paper examines consumer responses to a sector-wide voluntary introduction of animal welfare labels on fresh meat products in the German grocery retailing sector. The authors exploit the quasi-experimental variation in consumers' exposure to the label to measure the impact on (i) choices of meat labeled with the highest animal welfare standard, and (ii) the change in the willingness to pay for meat associated with the highest animal welfare standard. This study reveals a noteworthy impact of the animal-welfare-label introduction. The authors find the share of households' meat purchases with the highest animal welfare standards goes up by 2.19 percentage points and the willingness to pay increases by 0.31 (EUR/500g) for the average German household after the label introduction. Examining heterogeneity across different demographic groups, the authors further find the younger generations show the strongest response to the animal welfare labels.

Keywords: Animal Welfare, Food Labeling, Consumer Choice, Sustainable Retailing