Ethical Appetite: Consumer Preferences and Price Premiums for Animal Welfare-Friendly Food Products

Abstract: This study examines how consumer attitudes toward animal welfare influence food selection and pricing using real-world market data from a Swiss supermarket. Our findings indicate that higher animal welfare standards are consistently associated with higher prices, suggesting that ethical considerations play a significant role in generating price premiums based on consumer preferences. On average, a one-point increase in the animal welfare score (ranging from 1 to 5, with 5 being the highest) corresponds to a 16.4% price increase, with the effect being most pronounced in Dairy & Eggs (25.3%), compared to Meat & Fish (14.3%). These results highlight the psychological and behavioral factors underlying consumer preferences for ethically produced foods. Additionally, we find limited evidence of a price premium for climate-friendly food products, observed only in Yogurts & Desserts, a subcategory within Dairy & Eggs. Our findings contribute to the understanding of how ethical food attributes influence consumer decision-making and pricing in retail settings.