Consumer preferences for cage-free eggs and impacts of retailer pledges

Most large US food retailers and restaurants have made pledges to sell only cage-free eggs. If the pledges are upheld, about 75% of the egg laying flock will have to be converted to cage-free by the year 2025. However, it is an open question as to whether the market will support such a change. To address this issue, a national survey of over 2,000 US egg consumers was conducted to estimate cage-free egg demand among consumers exposed to different types of information. We find a high degree of heterogeneity in willingness-to-pay (WTP) for cage-free eggs. Half of the consumers are WTP no more than a $0.30/dozen premium for cage-free eggs; however, the mean premium is $1.16/dozen, suggesting a small fraction of consumers are willing to pay sizeable amounts for the cage-free label. Ultimately, the results suggest there is potential for the market-share for cage-free eggs to rise above the current state even at premiums as high as $1.00/dozen. However, even at much more modest price premiums, the potential for cage-free eggs to attain majority market share is unlikely, particularly if conventional eggs advertise other desirable attributes. We also find that retailers who completely remove more affordable, conventional eggs are likely to experience a significant increase in the share of consumers who choose not to buy eggs.