Determinants of consumer willingness to pay for quality-graded Australian sheep meat

Abstract

The present study investigated the influence of a quality-grading system, demographic information and consumption preferences on consumer willingness to pay (WTP) for sheep meat. Eating quality was defined by four grades developed by the Meat Standards Australia (MSA) sheep meat-grading scheme. These grades were based on consumer palatability scores for cooked sheep-meat samples and described as 2-star ('unsatisfactory' quality), 3-star ('good every day' quality), 4-star ('better than every day' quality) and 5-star ('premium' quality). Currently, sheep-meat available in Australian retail outlets that meets MSA quality specifications is trademarked as 'MSA graded' and consists of lamb that falls into at least the 3-star quality band. There is no distinction made between 3-, 4- and 5-star-graded product. A challenge for marketers would be pricing the product by these three grades should finer-quality differentiation be adopted. The present study evaluated consumer WTP for the MSA quality grades and interactions with consumer demographic factors and consumption preferences. Results clearly showed that consumers were willing to pay less for the 2-star grade and more for 4- and 5-star grades, than for 3-star grade. Robust results for the impact of demographic and consumption preferences on WTP were limited to consumer age, occupation, income level and the interaction between MSA grade and consumer age.