A censored regression analysis of household-level demand for pastured eggs in the United States

Purpose - This paper empirically investigates the demand for pastured eggs in the United States and evaluates the welfare consequences of Japan's egg import tariff reductions for the US consumers. Design/methodology/approach - Using household-level Nielsen Homescan panel data, a fixed-effects Heckman two-stage sample selection model is estimated. Findings - The estimation results ascertain the importance of a set of household socioeconomic characteristics, which are found to influence both the purchase probabilities and the consumption amounts associated with pastured eggs. In addition, demand for pastured eggs is estimated to be inelastic, and pastured eggs are found to be a normal good, more specifically a luxury. Research limitations/implications - The dataset used in this study reflect purchases only for at-home consumption, lacking information on away-from-home purchases. Originality/value - Building upon previous research, this study makes the following distinct contributions to the current literature. To the best of our knowledge, it constitutes the first study to empirically examine the demand for pastured eggs, using household-level panel data and an estimation model that not only allows for left-censoring but also controls for regional and time fixed effects. Second, the present study reflects a unique effort in analyzing the adverse welfare consequences of the increased egg prices in the United States brought by a reduction of Japanese import tariffs on US-supplied eggs, focusing specifically on pastured eggs.