Valuing the organic attribute in chicken meat: correcting for endogeneity

Overall, chicken consumption has increased substantially in recent

decades due to farming and processing intensification as well as

the consumer perception of its benefits. Although organic chicken

is perceived to taste better, support higher animal welfare and

have benefits for the environment, it is unclear to what extent

the organic attribute in chicken carries a premium in the eyes of

consumers. The purpose of this paper is to estimate this robustly.

This is done by estimating a hedonic pricing model using a comprehensive

dataset. The model’s endogeneity is corrected using

consumer characteristics as instruments. When making this correction,

the value of the organic attribute is two to five times larger

than without it (depending on the estimation method used). This

leads to an average premium in relation to conventional chicken

of 135% for the organic attribute in chicken.