The Price of Happy Hens: A Hedonic Analysis of Retail Egg Prices
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This paper analyzes price differentials among conventional, cage-free, organic, and
Omega-3 eggs using retail scanner data from two regional markets and the United States
as a whole. Results reveal significant premiums attributable to cage-free (a 57% premium
on average) and organic (an 85% premium on average). However, significant variation
exists among geographic locations; price premiums for organic over conventional eggs in
Dallas are almost twice as high as those in San Francisco. Estimates indicate that about
42% of the typically observed premium for cage-free eggs over conventional eggs (and
36% of the premium for organic eggs) can be attributed to egg color rather than differences
in hens’ living conditions. Despite the large implicit price premiums for cage-free
and organic, our data reveal that most shoppers are not willing to pay such high prices for
cage-free and organic attributes.