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Experimental Evidence of Risk Aversion in Consumer Markets: The Case of Beef Tenderness

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  • Alfnes, Frode
  • Rickertsen, Kyrre
  • Ueland, Oydis

Abstract

Consistency of quality is important for brand loyalty and market share in consumer markets. Among consumers of beef, tenderness is the primary quality attribute. We use an experimental auction market to investigate how inconsistency in tenderness affects consumers' willingness to pay (WTP) for beef. We find that both the level and the spread of tenderness affect consumers' WTP for beef. Categorization the beef into various classes of tenderness increased the total value of the beef by 8%, which suggests that improved tenderness labeling may be a profitable strategy.

Suggested Citation

  • Alfnes, Frode & Rickertsen, Kyrre & Ueland, Oydis, 2005. "Experimental Evidence of Risk Aversion in Consumer Markets: The Case of Beef Tenderness," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24553, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae05:24553
    DOI: 10.22004/ag.econ.24553
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    More about this item

    Keywords

    Consumer/Household Economics;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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