AnalysisWillingness to pay for other species' well-being

Benefit-cost analysis of environmental policies typically focuses on benefits to human health and well-being. For other species, economists have attempted to measure human WTP for changes in the numbers of individuals for different types of wildlife, and to preserve biodiversity. When it comes to humans' WTP for improvements in the quality-of-life for other species, however, the evidence is limited. Morbidity and quality-of-life considerations may be particularly important to the task of valuing non-fatal harm to wildlife in the wake of an environmental disaster. We argue that the other species morbidity-reduction component of WTP should be calculated net of any “outrage” component associated with the cause of the harm. This net WTP is likely to be correlated with the premium that people are willing to pay for chicken products from birds for which the quality-of-life has been enhanced by improved animal welfare measures. This paper uses a conjoint choice stated preference survey to reveal the nature of systematic heterogeneity in preferences for “humanely raised” versus “conventionally raised” chicken. We also use latent class analysis to distinguish between two classes of people-those who are willing to pay a premium for humanely raised chicken, and those who are not.

Research Highlights► Environmental benefit-cost analysis typically ignores other species' well-being. ► Our conjoint choice stated preference survey elicits preferences for this well-being. ► We model WTP for other species well-being as a function of consumer attributes. ► Latent class analysis distinguishes groups who do and don't care about well-being. ► The valuation of animal welfare is relevant beyond just agricultural economics.