ACSPRI Conferences, ACSPRI Social Science Methodology Conference 2010

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Using Discrete Choice Experiments to Determine the Relative Value of Intrinsic and Extrinsic Meat Attributes: A Case Study of Australian Beef Consumers

Wendy Umberger, Simone Mueller

Building: Holme Building
Room: Cullen Room
Date: 2010-12-03 09:00 AM – 10:30 AM
Last modified: 2010-11-17


Changing global food system dynamics and more demanding consumers have lead food industry leaders and policy makers to consider the value of providing additional information about the quality, safety, origin and process attributes of food products.  As such, economists and other social scientists are increasingly called on to conduct research to determine the efficacy of food labeling policies and to estimate the costs and benefits of policy alternatives.  Determining the social benefits of labelling information can be challenging for several reasons: 1) consumers tend to have heterogeneous preferences and utility for food attributes, 2) consumers are often unable to articulate the actual value of food attributes or information, 3) consumers may be unaware of the affect information has on their purchasing behaviour, and 4) the distribution of value through the value chain is ambiguous (Crespi and Marette, 2001).   Estimating value can be particularly difficult if the product attribute or information is non-utilitarian, abstract, requires a sensory experience, is misunderstood and/or is used subconsciously (Lusk and Anderson, 2004; Lusk et al., 2005; Fitzsimons et al., 2002, Umberger et al., 2003; Umberger and Mueller, 2010). 

Both direct and indirect research methods can be used to ascertain this information; however, direct methods such as rating, ranking, attitudinal measures may overestimate the importance of product characteristics (Kolodinsky, 2008).   Discrete Choice Experiments (DCEs) are increasingly preferred because of their proven ability to simultaneously estimate relative values for multiple product attributes and to predict consumers’ actual market behavior (Lusk; Louviere, Hensher and Swait, 2000).  DCEs can be framed to closely resemble purchasing scenarios where consumers must choose from a set of products, each with different attributes.  Respondents are typically not aware of which attributes researchers are interested in, thus reducing social response bias.

To demonstrate the usefulness and issues related to the use of DCEs when studying food choices, we present the results of a unique DCE designed to estimate the relative importance of intrinsic and extrinsic quality attributes to Australian beef consumers.  In the DCE, consumers choose their preferred beef steaks from options varying in a large number of intrinsic (marbling and fat trim) and extrinsic/credence (brand, health, forage, meat standards/quality, and production and process claims) attributes. This is the only known DCE to present these attributes to consumers visually – in a manner that more realistically simulates the retail choice scenario for beef and allows us to evaluate the relative importance of attributes that consumers use both consciously and unconsciously when making product choices.  Direct measures are also used to measure the importance of the attributes included in the DCE and are compared to the DCE results.  A latent class scale adjusted choice model is used to explore preference heterogeneity and to demonstrate the importance of understanding the characteristics of various consumer ‘segments’ and the implications for relevant policy decisions are discussed.  Therefore, this paper highlights the importance of understanding how consumers process information when making food choices, and presents insight on the validity of estimates from previous valuation studies using both direct methods and DCEs to determine the value of food attributes.