Responsible antibiotic use labeling and consumers' willingness to buy and pay for fluid milk

Abstract

ABSTRACT: Concerns about antibiotic resistant infections in the United States have called for reduction of antibiotic use in livestock, including dairy cattle. Although effective in curbing antibiotic use, universal organic dairy farming would be impractical and unattainable due to its high land and premium demands. The US Department of Agriculture's organic certification, which completely eliminates antibiotic use in milk production, also raises animal welfare concerns, as it could discourage the use of antibiotics even to treat indicated diseases. Therefore, a proposed alternative for US consumers is a label indicating the responsible antibiotic use (RAU) – not complete elimination – that would minimize antibiotics more than conventional (unlabeled) milk and maximize animal welfare more than organic milk. Our goal was to determine consumers' (1) self-reported preference and (2) willingness to pay for this hypothetical RAU label of milk relative to existing substitutes in organic and unlabeled fluid milk. We conducted (1) a nationally representative survey of US adults and (2) a randomized non-hypothetical experimental Becker-Degroot-Marschak auction with real money and real milk. Although almost half of the survey participants (48.5%) responded that they would buy a RAU-labeled milk, consumers in the experimental auction refused to pay a significant premium for the milk compared with unlabeled milk (mean willingness to pay (95% confidence interval) per half-gallon: $1.92 ($1.65–$2.19) for RAU-labeled milk versus $1.86 ($1.58–$2.13) for unlabeled milk). These results suggest that consumers' survey-identified preferences for RAU-labeled milk could reflect either social desirability bias or a genuine preference for which, however, consumers simply will not pay a significant premium. The study provides preliminary data for future exploration of marketability of the proposed RAU label in the United States and demonstrates the benefits of using complementary survey and experimental auction approaches to understand the potential market for a new dairy product.

Keywords

• antibiotics
• willingness to pay
• dairy milk
• experimental auction
• survey