Sustainability Publications

Hedonic Analysis of Sustainable Attributes of Fresh Eggs

Thasanee Satimanon, Dave D. Weatherspoon

Abstract

This study aims to determine price premiums of sustainable attributes for fresh eggs by using hedonic analysis.  The sustainable attributes defined here include free range/cage free and recyclable packaging attributes (paper pulp packaging). Welfare-managed eggs have a price premium equal to 3.57 cents per egg, the sustainable packaging variable was not found to be significant.  The most important factor that influenced price premiums was whether the eggs were organic or not, which had a price premium of 16.5 cents per egg. We tested to determine if the stacked attributes of organic and welfare-managed eggs received a super-premium, it was found to only have a price premium of 11.26 cents per egg which is less than the price premium of organic egg. This implies that the optimal strategy for egg manufactures and retailers in the short run should maximize profits by offering organic or welfare-managed egg independently.  This means that they should continue to segment the market until consumers perceived these attributes as being different. In addition, whether recyclable packaging (paper pulp packaging) has more value added or not is still ambiguous. The best strategy for manufactures and retailers may be to market sustainable packaging for each specific region of the U.S. since each state has different laws and opportunities to recycle plastic and styro-foam products.