An incentive compatible conjoint ranking mechanism.

(5) We also investigated whether [[rho].sub.1m] was rank dependent--i.e., whether the error-variance effect resulting from moving from non-IC rankings to IC rankings depended on the rank. We could not reject they hypothesis that the IC treatment effect in the scale equation was the same for initial ranks as it was for the latter ranks according to a likelihood ratio test (p-values were 0.17 for the steak model and 0.47 for the ground beef model).

Jayson Lusk is professor and Willard Sparks Endowed Chair, Department of Agricultural Economics, Oklahoma State University, and Deacue Fields and Walt Prevatt are associate professor and professor, respectively, both in the Department of Agricultural Economics, Auburn University. Table 1. Meat Attributes and Attribute Levels Used in Conjoint Study Attributes Attribute Levels Pasture feed Cattle grazed in pasture only

(nothing mentioned about how

animal was fed) Antibiotic and Cattle raised without antibiotics,

hormone use no growth hormones added

(nothing mentioned about

growth hormones or antibiotics) Traceability Cattle traceable back to farm

(nothing mentioned about

traceability) Size 1 1-lb steak (or 1-lb ground beef)

21-lb steaks (or 2-lbs ground

beef) Cash offered $3 (or $1 if ground beef)

$5 (or $2 if ground beef)

$7 (or $3 if ground beef)

$9 (or $4 if ground beef) Table 2. Rank-Ordered Logit Estimates

Ground Beef

Parameter Std. Error Variable

Pasture 1.071 *** (a) 0.167

Hormone 1.237 *** 0.254

Trace 0.972 *** 0.196

Size 0.616 *** 0.240

Cash 0.696 *** 0.144

None -6.763 *** 0.882

Info * Pasture 0.257 1.013

Info * Hormone 0.341 1.235

Info * Trace -0.407 0.513

Info * Size -0.643 ** 0.321

Info * Cash 0.115 0.655

Info * None 0.042 5.206

Non-Hyp * Pasture 0.095 0.950

Non-Hyp * Hormone 0.091 1.098

Non-Hyp * Trace -0.317 0.596

Non-Hyp * Size 0.109 0.620

Non-Hyp * Cash -0.228 0.445

Non-Hyp * None 2.056 3.916

Non-Hyp * Info * Pasture -0.370 0.498

Non-Hyp * Info * Hormone -0.235 0.472

Non-Hyp * Info * Trace 0.675 0.526

Non-Hyp * Info * Size -0.018 0.455

Non-Hyp * Info * Cash 0.016 0.304

Non-Hyp * Info * None -0.933 1.462 Scale function

Raan2 -0.250 *** 0.085

Rank3 -0.166 0.101

Rank4 -0.695 *** 0.122

Rank5 -0.590 *** 0.144

Raan6 -0.386 *** 0.140

Raan7 -0.593 *** 0.150

Rank8 -0.592 *** 0.200

Info 0.136 0.722

Non-Hyp 0.014 0.774 Number of observations 272 Log-likelihood function -2716.918

Steak

Parameter Std. Error Variable

Pasture 0.818 *** 0.168

Hormone 1.310 *** 0.318

Trace 0.901 *** 0.303

Size -0.020 0.259

Cash 0.636 *** 0.095

None -11.873 *** 1.727

Info * Pasture 0.676 ** 0.334

Info * Hormone 0.466 0.471

Info * Trace -0.255 0.437

Info * Size 0.647 0.609

Info * Cash -0.158 0.134

Info * None 1.289 ** 0.602

Non-Hyp * Pasture -0.421 * 0.246

Non-Hyp * Hormone -0.413 0.491

Non-Hyp * Trace -0.554 0.356

Non-Hyp * Size 0.340 0.320

Non-Hyp * Cash -0.464 *** 0.127

Non-Hyp * None 8.082 *** 2.446

Non-Hyp * Info * Pasture -0.005 0.427

Non-Hyp * Info * Hormone -0.220 0.560

Non-Hyp * Info * Trace 0.734 0.491

Non-Hyp * Info * Size -1.206 * 0.569

Non-Hyp * Info * Cash 0.465 *** 0.117

Non-Hyp * Info * None -5.698 *** 0.659 Scale function

Raan2 -0.337 *** 0.115

Rank3 -0.103 0.116

Rank4 -0.666 *** 0.124

Rank5 -0.941 *** 0.187

Raan6 -0.681 *** 0.162

Raan7 -0.997 *** 0.208

Rank8 -1.085 *** 0.227

Info -0.530 *** 0.108

Non-Hyp 0.610 * 0.346 Number of observations 243 Log-likelihood function -2471.045 (a) One (*), two (**), and three (***) asterisks represent the 0.10, 0.05, and 0.01 levels of statistical significance, respectively. Table 3. Market Share Simulations (a)

Market Share Implied Market Share

from Incentive Implied from

Compatible, Traditional, Products in Nonhypothetical Hypothetical Choice Set Conjoint Ranking Conjoint Ranking Steak

Conventional 0.4756 0.6115

[0.3770, 0.582] [0.5003, 0.7193]

Pasture fed 0.5243 0.3884

[0.4179,0.6229] [0.2806,0.4996] Ground beef

Conventional 0.4419 0.5742

[0.2846, 0.6147] [0.4295,0.7053]

Pasture fed 0.558 0.4257

[0.3852, 0.7153] [0.2946, 0.5704] Products in Choice Set Difference Steak

Conventional -0.1359

[-0.2774, -0.0078]

Pasture fed 0.1359

[0.0078,0.2774] Ground beef

Conventional -0.1322

[-0.3402,0.1001]

Pasture fed 0.1322

[-0.1001,0.3402] (a) Assumes conventional and pasture fed meat are the only products in the choice set, conventional steak (ground beef) is $8.00/lb ($2.25/lb) and pasture fed is $10.00/lb ($4.25/lb) and assumes consumers do not have information about pasture fed beef. (b) Numbers in brackets [] are 95% confidence intervals obtained by parametric bootstrapping.