Will American consumers pay more for eco-friendly labeled canned tuna? Estimating US consumer demand for canned tuna varieties using scanner data

Abstract

This study estimates consumer demand for eco-friendly labeled canned tuna products in two distinct US marketing channels, conventional and natural supermarkets, to evaluate market-based incentives for conservation measures that affect fishing costs and retail prices. Using retail scanner data, this paper finds that US consumer demand for canned tuna varies depending on the species of tuna, what gear type was used, whether the can is sold in natural food or conventional supermarkets, and whether canned product is or is not certified as eco-friendly. The paper's main conclusions are that retail price premiums for eco-friendly products face upper limits due to consumer responses to higher prices, and are most effective when coupled with: (1) inelastic own-price elasticity of demand; (2) price premium signals that are transmitted from retail markets to raw material producers; and (3) limited retail consumption substitution possibilities with lower-priced conventional products that help maintain price premiums and that otherwise create conservation disincentives by increasing conventional supply. Results from this paper not only have unique implications for various forms of international tuna fisheries policy that incorporates or anticipates change in market behavior, but also could serve as a scientific reference to clarify the trade disputes.