Analysis of Consumer Preference for Milk Produced through Sustainable Farming: The Case of Mountainous Dairy Farming

Abstract

As income is rising and urbanization progressing, the consumption of meat and dairy products is increasing, especially in developing countries. However, increasing livestock production leads to challenges that need to be addressed, such as yielding environmental pollution and causing climate change. Due to these circumstances, the importance of sustainable livestock farming has been highlighted in order to effectively utilize natural resources and to protect the environment. We analyzed consumers' preference and willingness to pay for milk, one of the representative dairy products, which was produced in a sustainable way. Among the various attributes of milk, marginal willingness to pay for "performing sustainability" through mountainous farming was estimated to be the biggest. The willingness to pay was revealed to be higher for the consumer group with a high awareness of sustainable farming than the consumer group with low awareness. The empirical results in this study suggest that it is important to consider the economic feasibility of dairy farming by forming a consensus with consumers through publicity and changing the production pattern to promote sustainability.