Valuing Animal Welfare with Choice Experiments: An Application to Swedish Pig Production

In this paper, the demand for animal welfare attributes when buying pork fillet is investigated among Swedish respondents. More specifically, the coefficients of an indirect utility function and willingness to pay for animal welfare attributes are estimated. The utility function is estimated using a multinomial logit and a random parameter logit model. A realistic scenario when modeling consumer choices is to allow for heterogeneity in preferences. The random parameter logit model departs from the well known IIA property and allows for a more flexible taste distribution across individuals. The need for assuming randomness of some parameters are evaluated by using a specification testing procedure with artificial variables developed by McFadden and Train (2000). From this study it can be concluded that the preferences for some of the animal welfare attributes are heterogenous across the respondents. There exists both negative and positive wtp for animal welfare attributes. Further, the study reports on the distribution of individual wtp.