Survey tackles consumer perception of added hormones

Survey tackles consumer perception of added hormones

Results show false beliefs tend to inflate willingness to pay for products with "no hormones added" labels.

The latest Oklahoma State University department of agricultural economics “Food Demand Survey” delved into consumers' beliefs about the use of added growth hormones in livestock and poultry production, revealing that many are misinformed on the topic.

Survey participants were first asked: “What percentage of the following types of farm animals in the United States are given added hormones to promote growth and muscle development?” Respondents indicated that, on average, they believed that more than half of all farm animals are given added hormones to promote growth and development.

Source: Oklahoma State University

Beef cattle ranked the highest; participants stated, on average, that about 62% of all beef cattle were given added hormones. Participants also believed, on average, that just more than half of the broiler chickens and pigs in the U.S. were given added growth hormones. The reality is, however, that most beef cattle receive added growth hormones, but no broiler chickens or pigs do. Less than 2% of respondents correctly answered that 0% of hogs and broilers are given added hormones, meaning that 98% of respondents incorrectly think hormones are used in pork and chicken production.

To investigate how these false beliefs might affect purchasing habits, the survey asked participants a second question: “If you walked into your local grocery store and saw a package of meat with the label ‘no added hormones,’ what is the highest premium you would be willing to pay for the following meats with this label over meats without this label?”

Those surveyed were willing to pay (WTP), on average, premiums between $1 and $2 for each of the meat cuts labeled “no added hormones.” The highest was for steak ($2.14/lb.), and the lowest was for deli ham ($1.32/lb.).

“Of course, paying a premium for chicken or pork labeled ‘no added hormone’ is superfluous because all pork and chicken production avoids the use of added growth hormones,” the report notes, adding that false beliefs tend to inflate the WTP for "no hormones added" labels.

As measured in the first question, the survey found that people’s beliefs are correlated with their willingness to pay a premium for no added hormones.

For example, a person who thinks no hormones are used in pork will pay an estimated premium of $1.44/lb. for pork chops with a no added hormones label, whereas a person who thinks 100% of pigs are given hormones is predicted to pay a premium of $1.81/lb. The same figures are $1.42/lb. and $1.92/lb. for chicken breast. These false beliefs dampen demand for conventional pork and chicken, the report notes.

Estimates suggest that WTP for chicken breast and pork chops are both about 45 cents/lb. lower than would be the case if consumers correctly knew that no added hormones are used in broiler and hog production.

“All this, perhaps, explains why many pork and poultry producers add the claim ‘no added hormones’ to the label,” said Dr. Jayson Lusk, regents professor and Willard Sparks endowed chair in the Oklahoma State University agricultural economics department. “These labels, however, while truthful, might also be misleading, because as our survey shows, people think there are high levels of hormone use in pork and poultry production.”

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