Valuing Animal Welfare Labels with Experimental Auctions: What do we learn from Consumers?

In this paper two types of experimental auctions (endowment and full bidding) are used to elicit consumer preferences towards different labels providing information on animal welfare practices. The three types of labeling schemes evaluated are the comprehensive “animal welfare label”, the “good animal housing”, and the “good human-animal relation and transport conditions”. Our results suggest that there are no statistically significant differences in the elicited values across labelling schemes. However, there are clear differences across auction types. Bids elicited from auctions in which participants were endowed with the product are higher than those from auctions in which participants had to fully bid for the product. Recommendations and policy implications derived from our findings are discussed.