?url_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Adc&rft.title=Consumer+Evaluation+of+Environmental+and+Animal+Welfare+Labelling%3A+An+Econometric+Analysis+on+Panel+Data+Using+Mixed+Multinomial+Logit&rft.creator=Andersen%2C+Laura+M%C3%83%C2%B8rch&rft.subject=Consumer+issues&rft.description=The+purpose+of+this+working+paper+is+to+estimate+marginal+willingness+to+pay+for+eggs+carrying+different+labels.+Among+other+things+these+labels+indicate+environmental+features+and+different+levels+of+animal+welfare+for+the+hens+that+produce+the+eggs.+The+data+on+eggs+are+part+of+a+very+comprehensive+panel+data+set+covering+household+purchases+of+non-durables+during+a+five+year+period.+For+each+family+a+wide+range+of+background+characteristics+are+available.+Detailed+data+on+eggs+are+available+during+the+one+year+period+from+July+1999+to+June+2000+used+in+this+working+paper.%0D%0ACompared+to+simple+statistics%2C+such+as+the+average+market+share+of+different+egg+types%2C+econometric+estimations+make+it+possible+to+disentangle+the+effect+of+labels+from+the+effects+of+e.g.+differences+in+prices.+Discrete+models+such+as+the+multinomial+logit+make+it+particularly+simple+to+estimate+the+willingness+to+pay+for+different+characteristics+of+goods%2C+in+this+case+different+labels.+Had+the+purpose+been+to+estimate+substitution+effects%2C+a+continuous+model+would+have+been+used+instead.+%0D%0AThe+estimations+are+conducted+using+the+new+and+flexible+Mixed+Multinomial+Logit+model+(MMNL)+also+known+as+Random+Parameter+Logit+(RPL).+Mixed+multinomial+logit+allows+heterogeneity+among+households+by+letting+the+parameters+of+the+household+utility+functions+be+drawn+from+a+common+distribution+instead+of+restricting+them+to+be+identical+for+all+households.+Estimating+the+parameters+of+the+distribution+of+the+parameters+of+the+utility+functions+yields+not+only+a+measure+of+the+marginal+willingness+to+pay+for+different+types+of+eggs%2C+but+also+a+measure+of+the+degree+of+heterogeneity+among+the+households.%0D%0AThe+eggs+are+divided+into+battery+eggs+(%C3%A2%C2%80%C2%98bur%C3%83%C2%A6g%C3%A2%C2%80%C2%99)%2C+barn+eggs+(%C3%A2%C2%80%C2%98skrabe+%C3%83%C2%A6g%C3%A2%C2%80%C2%99)%2C+free-range+eggs+(%C3%A2%C2%80%C2%98fritg%C3%83%C2%A5ende%C3%A2%C2%80%C2%99)+and+organic+eggs+(%C3%A2%C2%80%C2%98%C3%83%C2%B8kologiske%C3%A2%C2%80%C2%99)+and+the+marginal+willingness+to+pay+for+the+three+last+types+relative+to+battery+eggs+are+estimated.+The+marginal+willingness+to+pay+for+different+types+of+eggs+turns+out+to+vary+whit+the+chain+of+stores+in+which+the+purchase+is+made.+Econometric+estimations+using+store-level+data+reveals+that+customers+in+some+stores+(e.g.+Superbrugsen)+are+generally+willing+to+pay+for+labels+indicating+environmental+and+animal+friendly+production+methods%2C+while+customers+in+other+stores+(e.g.+Bilka)+are+reluctant+to+do+so.+Combining+data+from+many+different+stores+leads+to+contra-intuitive+results+caused+by+the+high+level+of+heterogeneity+among+customers%2C+prices+and+variety+in+the+different+stores.%0D%0AIt+is+found+that+models+allowing+the+consumers%C3%A2%C2%80%C2%99+evaluation+of+the+different+labels+to+vary+with+background+characteristics%2C+such+as+the+geographical+location+of+the+household+residence%2C+are+significantly+better+than+models+ignoring+background+variables+completely.+Models+allowing+the+evaluation+to+vary+with+attitudes%2C+such+as+attitude+to+branded+goods%2C+are+also+significantly+better+than+the+model+ignoring+these+effects.+The+effect+of+the+age+of+the+main+buyer+is%2C+in+most+cases%2C+not+significant.%0D%0AIt+is+reasonable+to+expect+the+value+of+different+labels+to+vary+between+households.+Animal+welfare+may+be+very+important+to+some+households%2C+but+have+little+or+no+value+in+other+households.+These+differences+are+perceived+as+%C3%A2%C2%80%C2%98heterogeneity+of+preferences%C3%A2%C2%80%C2%99+in+the+econometric+model.+The+labels+%C3%A2%C2%80%C2%98barn+eggs%C3%A2%C2%80%C2%99+and+%C3%A2%C2%80%C2%98free-range+eggs%C3%A2%C2%80%C2%99+mainly+indicates+increased+animal+welfare%2C+whereas+the+%C3%A2%C2%80%C2%98organic%C3%A2%C2%80%C2%99+label+indicates+a+more+environmentally+friendly+production+as+well+as+a+higher+level+of+animal+welfare.+Some+households+may+also+perceive+the+organic+eggs+as+being+healthier+than+other+egg+types+because+the+hens+are+fed+with+organic+feed.+The+heterogeneity+of+marginal+willingness+to+pay+for+organic+eggs+can+therefore+be+induced+by+differences+in+the+perception+and+evaluation+of+at+least+three+different+attributes%2C+whereas+the+heterogeneity+of+marginal+willingness+to+pay+for+barn+and+free-range+eggs+is+expected+to+arise+only+from+differences+in+perception+and+evaluation+of+animal+welfare.+Data+supports+this+hypothesis+as+the+estimated+heterogeneity+of+marginal+willingness+to+pay+is+generally+higher+for+organic+eggs+than+for+the+two+other+egg+types.+%0D%0A&rft.date=2002&rft.type=Working+paper&rft.type=NonPeerReviewed&rft.format=application%2Fpdf&rft.identifier=http%3A%2F%2Forgprints.org%2F109%2F1%2Fwp6-lma.pdf&rft.identifier=Andersen%2C+Laura+M%C3%83%C2%B8rch+(2002)+Consumer+Evaluation+of+Environmental+and+Animal+Welfare+Labelling%3A+An+Econometric+Analysis+on+Panel+Data+Using+Mixed+Multinomial+Logit.+Working+paper.&rft.relation=http%3A%2F%2Forgprints.org%2F109%2F