Demand for value-added pork in Sweden: a latent class model approach

Abstract

A choice experiment survey dataset is used to investigate heterogeneous preferences among Swedish consumers for attributes of pig production. To model the preferences, a random parameter logit model and a latent class model are estimated and compared. The comparison, based on predicted probability distribution, regression analysis of the probabilities, and investigation of the probability ratio, suggests that the latent class model is preferred to the random parameter logit model. Estimating a latent class model with three latent classes, using group dependent variables, i.e., class indicators, suggests that preferences may be characterized by food safety and animal welfare dimensions. Calculating the willingness to pay for the variables within each class, the author found that Class 1 is oriented towards animal welfare, Class 3 is oriented towards food safety, and Class 2 is intermediate of Class 1 and Class 3. Moreover, class membership and its implication for the assessment of organic pork are investigated. The respondents within the “food safety-conscious” class have a strong belief that organic food products are safer, though this class is also found to be the most price sensitive. The “animal welfare-conscious” respondents are also price sensitive, but to a lesser extent than the food safety-conscious consumers. Moreover, respondents that show a concern for animal welfare do not believe that organic pork is produced under more animal friendly conditions. The relatively large size of the animal welfare-conscious class and the negative perception of organic pork found in this group suggest that market opportunities exist for the marketing of animal welfare-certified products. [EconLit citations: C010; C500; Q100]. © 2010 Wiley Periodicals, Inc.