Can consumers' willingness to pay incentivize adoption of environmental impact reducing technologies in meat animal production?

This study develops a model estimating consumer willingness to pay (WTP) for environmental meat attributes and uses a multi-objective nutritional optimizer to explore the extent to which WTP can offset on-farm costs of reducing water use. Data for the WTP model are sourced from a literature survey of the Agricola and Google Scholar databases yielding 46 studies estimating WTP for pure and impure (organic, grass-fed, natural) environmental meat attributes. Bayesian analysis is used to estimate 3 models varying in independent variables. Models are evaluated by the correlation coefficient (R-2), root mean squared error of prediction (RMSPE) and posterior model probability. The most probable model is then used to estimate a confidence range of WTP for pure environmental beef. Impure environmental labels result in higher WTP than pure labels. Non-hypothetical WTP for pure environmental labeling for North American consumers ranges from 6.7% to 32.6%. A case study is conducted to identify the expected reduction in water use that can be funded from capturing WTP through labeling. A multi-objective nutritional optimizer is used to identify ideal management of beef cattle to reduce whole-system water use in three regions of the United States. Cost increases from management are varied over the predicted range in WTP and combined with the probability of a consumer purchasing beef at each WTP value to identify the theoretical effect on expected environmental impact reduction. A 10% premium is the ideal WTP, resulting in water use reductions between 24.4 L and 41.4 L. (c) 2014 Elsevier Ltd. All rights reserved.