AGRICULTURAL ECONOMICS Agricultural Economics 43 (2012) 607–620 Consumer valuation of safety-labeled free-range chicken: results of a field experiment in Hanoi Jennifer Ifft a,∗ , David Roland-Holst b , David Zilberman b a U.S. Department of Agriculture, Economic Research Service, 1400 Independence Avenue, SW, Mail Stop 1800, Washington, DC 20250-1800, USA b University of California-Berkeley, 207 Giannini Hall 3310, Berkeley, CA 94720, USA Received 31 March 2011; received in revised form 12 November 2011; accepted 19 March 2012 Abstract This article presents results of a field experiment designed to assess willingness to pay for safely produced free-range chicken in Hanoi, the capital of Vietnam. Improved safety of chicken production and trading is suggested as an important component of avian influenza control strategy, which aims to address the direct costs of avian influenza as well as the global public health externality. However, consumer demand for safely produced free-range chicken is unknown. Products that have credible food labeling are not common in traditional markets where the majority of free-range chicken is purchased. Valuing characteristics of products sold in informal markets is a major challenge that our experiment overcomes. As part of the experiment, we provided several vendors from these markets with safety-labeled free-range chicken. Consumer valuation of safety labeling was elicited through having experiment participants, who were representative of potential consumers, select between discount coupons for either safety-labeled chicken or regular chicken. Results indicate that consumers will pay at least $0.50, or a 10–15% premium, per chicken purchase for safety labeling, which emphasizes safe production, processing, and transport conditions. This premium is smaller than the premium currently paid for traditional chicken varieties that are considered to be tastier. Consumers with more education have higher valuation of safety labeling. Hence, safety labeling for high-quality free-range chicken can play a role in controlling livestock disease and improving public health. JEL classifications: C93, D12, Q01, Q18 Keywords: Food safety; Field experiments; Vietnam; Avian influenza Highly pathogenic avian influenza (HPAI) became endemic to Vietnam after several large outbreaks from 2003 to 2005 (Rushton et al., 2005). In addition to a total of 59 human deaths of 117 cases as of March, 2010 (World Health Organization, 2010), HPAI has caused an estimated U.S.$200 million of losses to Vietnam’s economy. A total of 59.3 million head of poultry have either been killed by HPAI or culled (Burgos et al., 2008). The direct economic cost and magnitude of potential public health externalities of HPAI made it a priority for policymakers and global decision makers. HPAI is a livestock disease that most directly affects producers and food markets but has global implications. That is, a major influenza pandemic could arise from the evolution of the H5N1 virus that causes HPAI. While this is a low-probability event (Peiris et al., 2007), the current estimated global economic loss from HPAI is $20 billion and the ∗ Corresponding author. Tel.: 202-694-5552; fax: 202-245-4847. E-mail address: jifft@ers.usda.gov (J. Ifft) costs of an influenza pandemic triggered by HPAI are estimated to be $2 trillion (FAO et al., 2008). Policies to control HPAI in developing countries, such as Vietnam, face several challenges. Although some poultry pro- duction is concentrated geographically or with large producers, the majority of poultry production is on a small-scale, free- range, and by diversified rural farmers. The production char- acteristics of free-range chicken are different from those of confined (translated from Vietnamese as “industrial”) chicken, with both presenting unique food safety and animal disease risks. Free-range chicken is more likely to be exposed to wild birds whereas industrial chicken production present risks in- herent to concentrated production (Otte et al., 2008). These types of chicken are also produced on different types of farms and marketed through different supply chains (Ifft et al., 2008) necessitating differentiated policies. Policies to control the spread of HPAI have largely focused on industrial production, and have even mentioned plans to phase out small-scale or free-range production. This has led to c  2012 International Association of Agricultural Economists DOI: 10.1111/j.1574-0862.2012.00607.x