Evidence of consumers' willingness to pay for the National Animal Identification system of the United States

Abstract

With the United States National Animal Identification System (NAIS) in place, consumers' concerns about Bovine Spongiform Encephalopathy (BSE) are mitigated and, by inference, consumers will be willing to pay for the NAIS. We estimated twelve alternative specifications of the generalized almost ideal demand system for beef, pork, and poultry, including indexes of news coverage of BSE in the U.S. as proxies for consumers' risk perception on BSE. Using the preferred model, we constructed scenarios on the basis of hypothesized impacts of the NAIS on consumers' risk perception on BSE inmeat. We found that the impact of BSE on consumer demand for meat was in itself sufficient to cover previously estimated costs of implementing the NAIS.