Did corporate campaigns in the US have any counterfactual impact? A quantitative model

De­ci­sion-mak­ing on which char­i­ties to es­tab­lish in­volves cer­tain com­plex pro­cesses. Part of this anal­y­sis is look­ing at the effec­tive­ness of differ­ent ap­proaches. Cur­rently at Char­ity En­trepreneur­ship, I am analysing how promis­ing the cor­po­rate out­reach cam­paigns are in im­ple­ment­ing the most promis­ing asks. Com­ing from a cluster ap­proach per­spec­tive, I analyse mul­ti­ple groups of ev­i­dence, one of which is his­tor­i­cal case stud­ies. This post ex­plains an anal­y­sis about the coun­ter­fac­tual im­pact of cage-free cor­po­rate cam­paigns in the US. We use this case as one of thirty-five pieces of ev­i­dence we took into ac­count in eval­u­at­ing how promis­ing the launch of new cor­po­rate out­reach cam­paigns would be. This par­tic­u­lar piece has limited weight in the de­ci­sion-mak­ing pro­cess, so please do not in­ter­pret this in sep­a­ra­tion from the other ev­i­dence we are go­ing to pre­sent in the fol­low­ing posts, which are:

1. Prob­a­bil­ity of fol­low-through once com­pa­nies pledge a change in policy.

2. Cost-effec­tive­ness of launch­ing new cor­po­rate cam­paigns, speci­fi­cally im­prov­ing man­age­ment of dis­solved oxy­gen level in Viet­nam.

3. Full re­port on cor­po­rate out­reach in­clud­ing, but not limited to, ev­i­dence, ex­e­cu­tion difficulty, and cost-effec­tive­ness.

In this piece of re­search, Char­ity En­trepreneur­ship iden­ti­fied and mod­el­led cru­cial fac­tors that could have con­tributed to the cur­rent per­centage of cage-free eggs: his­tor­i­cal trend, changes in the price gap be­tween cage-free and caged eggs, the effects of con­sumer will­ing­ness to pay for higher welfare, and the price elas­tic­ity of de­mand. In an­other sce­nario, the effect of avian flu was also ac­counted for. We con­cluded that in 2017-2018, the above fac­tors ex­plained only ~6% of cage-free eggs pro­duced, which leaves 10.4% of cage-free eggs that can be ex­plained by cor­po­rate out­reach (or other known and un­known fac­tors, e.g. an­i­mal ad­vo­cacy for re­duc­ing the con­sump­tion of cage eggs). In 2015, when the avian flu out­break oc­curred, anal­y­sis left only 0.6% of cage-free eggs un­ex­plained, which might sug­gest that there might have been a sig­nifi­cant fac­tor in the in­crease in cage-free eggs. Below, I elab­o­rate on all fac­tors re­searched and an­a­lyzed by me and CE’s re­search in­tern Vicky Cox, who played a cru­cial role in this re­search.

All fac­tors taken into ac­count:

Ob­served change

The first per­spec­tive we took into ac­count is whether the ob­served 13% change in the per­centage of cage-free in the US be­tween 2005 and 2018 matched the per­centage of eggs that were re­port­edly af­fected by the com­pa­nies that pledged to switch to cage-free eggs.

Us­ing in­for­ma­tion from the cor­po­rate com­mit­ment tracker (un­pub­lished) and Eg­gTrack’s re­port, we should see ~9% (8.67%) differ­ence in the frac­tion of cage-free eggs be­tween 2005 and 2018. So we could say that, at best, 9% of the egg mar­ket share could be ex­plained by com­mit­ments made by com­pa­nies. There are two prob­lems with those num­ber, how­ever:

  1. We found two com­pa­nies in the progress to­wards cage-free (Camp­bell’s and Hormel), but no available data on the num­ber of hens, and there­fore the num­ber of eggs, that this would af­fect. Con­se­quently, this data can­not be added to the ob­served per­centage.

  2. There are a lot of com­pa­nies on the cor­po­rate com­mit­ment tracker spread­sheet that are not on Eg­gTrack, mean­ing that their rate of progress is un­known and there­fore can’t be added to the ob­served per­centage.

The above ob­ser­va­tions mean that the ac­tual num­ber of af­fected eggs might be higher.

For some of the com­pa­nies on Eg­gTrack, progress was given in a break­down of shell egg progress and liquid/​in­gre­di­ent progress. We de­cided to weight these based on available in­for­ma­tion. Weight­ing of shell to liquid eggs in ob­served per­centages:

  • Com­pass Group: Com­pass uses 300 mil­lion liquid eggs and 100 mil­lion shell eggs each year (source). So the weight­ing was worked out as:

0.75(15)+0.25(88) = 33.25

Where 0.75 comes from the fact that three quar­ters (300 mil­lion liquid eggs/​400 to­tal eggs) of Com­pass Group’s pro­duc­tion are liquid eggs.

The 15 in brack­ets in­di­cates the per­centual progress the com­pany has done to­wards cage-free eggs in their use of liquid eggs (source).

  • Sodexo: Sodexo uses 220 mil­lion liquid eggs and 39 mil­lion shell eggs each year (source). So the weight­ing was worked out as:

0.85(16)+0.15(86) = 26.54

  • Ara­mark: Ara­mark uses 200 mil­lion liquid eggs and 30 mil­lion shell eggs each year (source). So the weight­ing was worked out as:

0.13(100) = 13

  • Other com­pa­nies that break their com­mit­ments down by shell and liquid eggs are:

Star­bucks

Pan­era Bread

Centerplate

Ruby Tuesday

How­ever, we do not have statis­tics for how many shell and liquid eggs each com­pany uses each year. So, ul­ti­mately, we don’t have an ob­vi­ous weight­ing. Since Cen­ter­plate is a food­ser­vice like Com­pass Group, Sodexo and Ara­mark, we as­sumed that their us­age of shell and liquid eggs is similar. There­fore, we used the fol­low­ing weight­ing (tak­ing the av­er­age of the above 3 food ser­vices): 0.18(100) = 18

Star­bucks, Pan­era Bread and Ruby Tues­day are all restau­rants. We as­sume that they will use more shell eggs than liquid eggs. We ar­bi­trar­ily weight this as: two-thirds shell, one-third liquid.

As a re­sult, we con­cluded that at least 9% and max­i­mally 13% of cage-free eggs could have been in­fluenced by the cor­po­ra­tions’ be­havi­our.

His­tor­i­cal trend

Another con­sid­er­a­tion we took into ac­count is the fact that in­creases in the rel­a­tive share of cage-free eggs might just be a mat­ter of a his­tor­i­cal trend and that the same in­crease would have be seen in the ab­sence of cor­po­rate out­reach cam­paigns. To es­ti­mate what would have been the pro­por­tion of cage-free eggs in 2016/​17/​18, we ex­trap­o­lated from the his­tor­i­cal trend.

In our anal­y­sis, we used ex­trap­o­la­tion from data up to 2013, be­cause that was the year that the first cage-free cam­paign started. Between the ex­pected per­centage of cage-free eggs that could be at­tributed to his­tor­i­cal trend and the ac­tual per­centage of cage-free eggs, there is a 5.7% differ­ence in 2016, 9.3% differ­ence in 2017, and 10.1% differ­ence in 2018. This is an 8.4% differ­ence on av­er­age that can­not be ex­plained by his­tor­i­cal trends.

Avian Flu (taken into ac­count only for anal­y­sis for 2015)

As pointed out by Šimčikas, in the year 2005 avian flu could have po­ten­tially pushed con­sumers into buy­ing cage-free eggs in­stead of cage eggs by caus­ing the price gap be­tween generic eggs and spe­cial­ity, cage-free eggs to close down quite dra­mat­i­cally. Ac­cord­ing to the re­port from the Eco­nomic Re­search Ser­vice, be­tween De­cem­ber 2014 and June 2015, more than 50 mil­lion chick­ens (and turkeys) in the United States died of highly pathogenic avian in­fluenza (HPAI) or were de­stroyed to stop the spread of the dis­ease. Th­ese birds ac­counted for ~12% of the U.S. layer pop­u­la­tion—this could ex­plain the ini­tial spike in the per­centage of cage-free eggs rel­a­tive to caged-eggs that was ob­served in 2015. It is also pos­si­ble that the de­crease in cage-eggs cre­ated an illu­sion of in­crease in cage-free egg con­sump­tion. Lay­ers ac­counted for a large ma­jor­ity of the lost birds. Over the May-De­cem­ber pe­riod in 2015, the bench­mark egg price was 61 per­cent above that from a year ear­lier, while pro­duc­tion de­clined only about 10 per­cent. Pro­duc­tion was low de­spite at least 21 mil­lion lay­ers be­ing added to the na­tional flock be­tween June 1, 2015, and Jan­uary 1, 2016, re­flect­ing the rel­a­tively low layer pro­duc­tivity that de­layed the re­cov­ery. How­ever, by March 1, 2016, the flock ex­panded by an­other 9 mil­lion birds and lay rates im­proved, re­sult­ing in more or less nor­mal­ised lev­els of pro­duc­tion. After the out­break, record-high egg prices were the most no­table mar­ket change, and price in­creases far sur­passed pro­duc­tion losses on a rel­a­tive ba­sis. Here, “nor­mal lev­els of pro­duc­tion” per­tains to the pro­duc­tion of cage-eggs. This is a point for the greater im­pact of the cor­po­rate cam­paigns, be­cause a higher ob­serv­able per­centage of cage-free eggs in the fol­low­ing years is not a re­sult of a de­crease in cage eggs.

The ex­panded role of cage-free prod­ucts may have also al­tered the sup­ply and de­mand for eggs, and re­sulted in ad­di­tional price volatility. While data on cage-free lay­ers in 2016 was limited, be­tween Septem­ber 2015 and Septem­ber 2016 over half of the es­ti­mated net in­crease in the na­tional flock was due to more cage-free lay­ers. Eggs are among the most price in­elas­tic foods—their price elas­tic­ity is es­ti­mated to be 0.27 where a 95% con­fi­dence in­ter­val is given by (0.08, 0.45) (source). As­sum­ing that this price elas­tic­ity holds, an in­crease of 61% in the price of eggs would have seen a 16.2% (4.88, 27.45) re­duc­tion in the quan­tity of caged-eggs con­sumed. If we as­sume that all of this re­duc­tion is made up of pur­chas­ing cage-free eggs in­stead, then cage-free eggs would see a 16.2% in­crease in de­mand.

Con­sumer Willing­ness to Pay

To simu­late con­sumer be­havi­our and in­fluence over the per­centage of cage-free eggs pro­duced, we used stud­ies on con­sumer will­ing­ness to pay for cage-free eggs. In a study on the mar­ket po­ten­tial for cage free eggs by the Food Mar­ket­ing In­sti­tute, An­i­mal Agri­cul­ture Alli­ance, and the Foun­da­tion for Food and Agri­cul­tural Re­search, it was found that when pro­vided no ad­di­tional in­for­ma­tion, half of con­sumers are will­ing to pay no more than a $0.30/​dozen pre­mium for cage free eggs. The mean pre­mium is $1.16/​dozen, sug­gest­ing a small frac­tion of con­sumers are will­ing to pay size­able amounts for the cage free la­bel. Al­most 60% of con­sumers have a will­ing­ness to pay for cage free less than $0.40/​dozen, but 33% have a value greater than $1.00/​dozen.

The re­sults sug­gest there is po­ten­tial for the mar­ket-share for cage free eggs to rise above the cur­rent state even at pre­miums as high as $1.00/​dozen. How­ever, even at much more mod­est price pre­miums, the po­ten­tial for cage free eggs to at­tain the ma­jor­ity mar­ket share is un­likely, par­tic­u­larly if con­ven­tional egg sel­l­ers ad­ver­tise other de­sir­able at­tributes. When rank­ing the im­por­tance of fac­tors that in­fluence the pur­chase of eggs, price came first with 43% rel­a­tive im­por­tance, while an­i­mal welfare came fifth be­hind safety, taste, and nu­tri­tion, with 8% rel­a­tive im­por­tance.

The above study seems to be the most rep­utable as it has the most re­spon­dents (>2,000) and it is used as the main source for nearly all other ar­ti­cles and re­ports on con­sumer will­ing­ness to pay. Some other re­ports have roughly the same num­bers, but pos­sess much less re­spon­dents. For ex­am­ple, this re­port with 327 re­spon­dents saw re­sults that 27% of re­spon­dents would be will­ing to pay a pre­mium of $0.98 for cage-free. The re­spon­dents for this sur­vey were col­lege stu­dents, who would per­haps be more will­ing than the older gen­er­a­tion to pay more for an­i­mal welfare, as younger peo­ple tend to care more about an­i­mal welfare. On the other hand, they might have a less sta­ble fi­nan­cial situ­a­tion and be averse to spend­ing more.

Based on these stud­ies, we con­cluded that ~30% of con­sumers were will­ing to pay pre­mium on cage-free eggs in 2007 and 32% were will­ing to do so in 2018. We con­cluded that this 2% in­crease in cage-free eggs’ con­sump­tion re­sulted from con­sumers’ choices that would, over­all, be par­tially in­de­pen­dent from cor­po­rate cam­paign­ing.

Refrain­ing from pur­chas­ing eggs

It was ob­served that be­tween 2014 and 2015, the per cap­ita egg con­sump­tion dropped by ~4% (4.04) (source). That brought up an­other in­quiry of in­ter­est: how might the com­plete re­moval of con­ven­tional eggs af­fect egg buy­ing be­hav­ior? To ex­plore this is­sue, it is now as­sumed that con­sumers have a choice be­tween a con­ven­tional egg op­tion (priced at $0.99/​dozen), cage free eggs (priced at $1.79/​dozen), and they also have the op­tion to choose “none” and re­frain from buy­ing eggs al­to­gether. As shown in the left panel of figure 9, un­der these as­sump­tions, 59% are pro­jected to choose con­ven­tional, 36% cage free, and 4% “none.” The right-hand panel of figure 9 shows the pro­jec­tions of what would hap­pen were the lower-priced con­ven­tional op­tion re­moved from the mar­ket. If this were to oc­cur, the mod­els pre­dict the share of con­sumers who would re­frain from buy­ing eggs would

in­crease from 4% to 17% (source, page 28). In case of such an in­crease in prices, 4% of con­sumers might re­frain from pur­chas­ing eggs.

Changes in prices of eggs caused by the avian flu outbreak

Price of caged eggs be­fore and af­ter the avian flu

Pre­limi­nary re­search pointed out some in­con­sis­ten­cies, so we analysed mul­ti­ple sources to es­ti­mate the in­crease in prices. The Re­port from the Eco­nomic Re­search Ser­vice shows a 61% in­crease in prices. When we look at the es­ti­mates, the 61% in­crease stated in the re­port is for con­sumer-grade eggs (fresh eggs on store shelves), but not for pro­cess­ing-grade eggs that are used by restau­rants and oth­ers. At­tempt­ing to read prices off Figure 1, we see that the price of eggs in May 2014 is US$1.05 and the price of eggs in May 2015 is US$1.7. Tak­ing these prices as ac­cu­rate, this is ~61% (61.9) in­crease. Mak­ing the price of eggs in May 2015 1.69 in­stead of 1.7 makes the price in­crease 60.95%, even closer to 61%.

Figure 1

Look­ing at the bench­mark price on all available USDA re­ports from May—De­cem­ber 2014 and tak­ing an av­er­age, and look­ing at the bench­mark price on all available USDA re­ports from May—De­cem­ber 2015, we have a 63.6% price in­crease.

The USDA, in a monthly sup­ply and de­mand re­port, in­creased its fore­cast for the price of Grade A large eggs in New York in 2015 to $1.60 to $1.66 per dozen. That is up from its May es­ti­mate of $1.30 to $1.36, and tops last year’s av­er­age price of about $1.42, which was a record high, ac­cord­ing to USDA data. In the fourth quar­ter of 2015, eggs will av­er­age $1.73 to $1.87 per dozen, up from about $1.63 a year ear­lier, the USDA said. Last month, the agency pre­dicted a dozen eggs would cost $1.33 to $1.45 in the fourth quar­ter.

Sum­maris­ing these three, we have:

  1. Price spike in June 2015: $2.40 com­pared to $1.20 in June 2014. In May 2014, the egg price is $1.05 and in­creases to $1.69-$1.70 in May 2015.

  2. Con­sid­er­ing the bench­mark prices from the USDA re­ports, prices in­crease from an av­er­age of $1.43 to an av­er­age of $2.34.

  3. Tak­ing the av­er­age price of eggs in 2014 from USDA’s re­port as $1.42, a 61% in­crease would mean that the av­er­age price of eggs in 2015 is $2.29.

Sum­maris­ing:

  • Price be­fore: $1.28 (1.1, 1.46)

  • Price af­ter: $2.08 (1.77, 2.39)

Which gives us the 95% CI of price in­crease as: 62.5% (60.9, 63.7)

Ab­solute price of cage-free eggs dur­ing the 2014-15 period

We didn’t man­age to find prices of eggs in 2014 and 2015, there­fore used two sep­a­rate meth­ods, both of them have some limi­ta­tions, so we think this part is es­pe­cially prone to er­ror. How­ever, It doesn’t af­fect the main con­clu­sions.

In 2015, it was found that, on av­er­age, cage-free eggs were 2.3 times more ex­pen­sive than caged eggs (source).

Us­ing these val­ues to give us a CI we get:

2014 price: $2.94 (2.53, 3.36)

2015 price: $4.78 (4.07, 5.50)

Whole­sale—the term seems to be syn­ony­mous with free-range—egg prices were in the $1.25 per dozen range in the fall of 2014, but by Au­gust of 2015 they had risen to $2.60 per dozen (source). The whole­sale price of a dozen eggs fluc­tu­ated be­tween $1 and $1.77 across the US in 2014, ac­cord­ing to gov­ern­ment statis­tics. Us­ing Guessti­mate, the av­er­age of this range is $1.40. The whole­sale price of a dozen eggs in 2014 was $1.40 (source). Us­ing the graph in this re­port, the price of whole­sale eggs was ~$1.40 in 2014 and ~$1.80 in 2015.

Us­ing these val­ues to give us a CI we get:

2014 price: $1.36 (1.29, 1.43)

2015 price: $2.20 (1.42, 2.98)

Price of caged and cage-free eggs when avian flu stopped af­fect­ing prices

It seems that avian flu stopped af­fect­ing the price of eggs in 2016. The largest gap in the prices of caged and cage-free eggs was in 2017. How­ever, ev­i­dence sug­gests that the price gap closed in 2018. Since it seems that avian flu stopped af­fect­ing the prices in 2016, and there are no ob­vi­ous out­side fac­tors that could ex­plain the price gap clos­ing in 2018, we as­sume that this might be the re­sult of cor­po­rate cam­paigns.

In 2016, due to an over­sup­ply, the av­er­age sel­l­ing price for cage eggs was down 64.9% (com­pared to 2015 where prices in­creased due to avian flu). Although cage-free egg prices also fell, they were only down by 13.2% (com­pared to 2015 prices) (source). A fall in cage egg prices of 49.8% can be seen on Statista where the price of a dozen eggs was $2.75 in 2015 and $1.38 in 2016. As of May 6, 2016, the USDA Na­tional Re­tail Re­port re­ported that the ad­ver­tised prices for shell eggs was $1.07 a dozen for white large USDA Grade A eggs while “cage-free” large white eggs sold at $2.49. This is a pre­mium of $1.42.

A dozen con­ven­tional eggs in March 2017 cost an av­er­age of $1.05. This was re­ported to be ‘less than half’ as ex­pen­sive as a dozen cage-free eggs, ac­cord­ing to price data from the USDA (re­ported by CNBC, they weren’t more spe­cific). Us­ing data from Bloomberg be­low, we can es­ti­mate that whilst a dozen caged eggs cost $1.05, a dozen cage-free eggs were at $2.85 (this is a pre­mium of $1.80).

Ac­cord­ing to USDA-Agri­cul­tural Mar­ket­ing Ser­vice data, while the pre­mium in 2018 is lower than it was in 2017, it is still a $1.28 pre­mium. This sug­gests that per­haps the gap in prices is clos­ing again (“while the pre­mium is lower than last year”). This idea is also backed up in an ar­ti­cle from Bloomberg which states that the price differ­en­tial be­tween cage eggs and cage free eggs is de­creas­ing. Rea­sons for this gap clos­ing seem as sim­ple as many cor­po­ra­tions hav­ing made progress on their cage-free com­mit­ments, which re­sults in the in­crease in sup­ply that re­duces cage-free eggs’ pre­mium over reg­u­lar eggs.

Since the biggest price gap was seen in 2017, we will model prices off this year and com­pare them to the prices in 2018 when the price gap be­gan to close. Us­ing the same study as pre­vi­ously on the mar­ket po­ten­tial for cage free eggs by the Food Mar­ket­ing In­sti­tute, An­i­mal Agri­cul­ture Alli­ance, and the Foun­da­tion for Food and Agri­cul­tural Re­search, it was found that ~30% of con­sumers would be will­ing to pay the pre­mium of $1.80 (based off the graph on page 2450). When the price gap started de­creas­ing in 2018, the pre­mium fell to $1.28, and at this price ~32% of con­sumers were will­ing to pay the pre­mium. Since it seems as if avian flu had stopped af­fect­ing prices by 2017-2018, it seems as if this 2% in­crease in the num­ber of con­sumers will­ing to pay for cage-free eggs is a re­sult of cor­po­rate cam­paigns in­creas­ing the sup­ply of cage-free eggs (mak­ing the pre­mium smaller).

Anal­y­sis of fac­tors be­tween 2017-2018

Based on the re­search above, we mod­el­led all fac­tors in Guessti­mate, con­clud­ing that these fac­tors ex­plain only 6% out of 16% of all cage-free eggs, which leaves 10.4% to be ex­plained by other fac­tors, i.a. im­pact of cor­po­rate cam­paigns. How­ever, we didn’t take into ac­count other fac­tors that might ex­plain the in­crease, e.g. in­di­vi­d­ual out­reach or, more im­por­tantly, poli­ti­cal change, par­tic­u­larly Cal­ifor­nia’s Propo­si­tion 2 that passed in 2008 as a re­sult of HSUS’s work. The Propo­si­tion, among other things, pro­hibits the con­fine­ment of hens in a man­ner that does not al­low them to turn around freely, lie down, stand up, or fully ex­tend their limbs, there­fore effec­tively ban­ning the us­age of bat­tery cages. Propo­si­tion 2 is cred­ited as prepar­ing the ground for the cam­paigns that fol­lowed with dozens of cage-free com­mit­ments from most com­pa­nies in the US. An­i­mal Char­ity Eval­u­a­tors claims that Propo­si­tion 2 was the main fac­tor that con­tributed to the suc­cess of the cam­paign against McDon­ald’s, which pledged policy change in 2015, pre­ced­ing a se­ries of cage-free com­mit­ments from other com­pa­nies. Given that, ~10% is the up­per con­fi­dence in­ter­val for the coun­ter­fac­tual im­pact of all of the cam­paigns in the US. To nar­row down the con­fi­dence in­ter­val we used re­search by Founders Pledge on i.e. cor­po­rate out­reach cam­paigns. They es­ti­mated that ev­ery cage-free cam­paign in the US that THL runs speeds up the com­mit­ment by 1-1.5 years on av­er­age. Us­ing the data from Egg Track we es­ti­mated that the av­er­age per­centage of eggs af­fected in 2017-18 is ~0.015%. There­fore, the to­tal per­centage of eggs af­fected by THL by speed­ing up ev­ery cage-free cam­paign is ~0.015% to ~0.023%. Ac­cord­ing to Chick­enWatch, there were 76 com­mit­ments taken in 2017 and 35 in 2018, giv­ing us 111 in to­tal. There­fore, the to­tal effect of THL be­tween 2017-18 is ~1.71% to ~2.56%, which we are go­ing to use as a lower band of the con­fi­dence in­ter­val, giv­ing us ~2.1- ~10% of the coun­ter­fac­tual im­pact of cor­po­rate cam­paigns.

Anal­y­sis of fac­tors dur­ing the pe­riod af­fected by the avian flu

Differ­ent re­sults can be ob­served from our similar anal­y­sis of the pe­riod af­fected by the avian flu. Here, the per­centage of cage-free eggs un­ex­plained by all the fac­tors taken into ac­count in the pre­vi­ous anal­y­sis and the im­pact of the avian flu is only 0.6%. That might provide the ar­gu­ment for the hy­poth­e­sis that the dis­ease out­break made the tran­si­tion eas­ier by clos­ing the price gap be­tween eggs from differ­ent hous­ing sys­tems and forc­ing some pro­duc­ers to partly switch to cage-free sys­tems, which offered greater food safety. Given how sur­pris­ing the re­sult was for us, we con­ducted sen­si­tivity anal­y­sis and dou­ble-checked the fac­tors that were the sources of the great­est un­cer­tainty in the fi­nal out­come. We listed po­ten­tial flaws with those es­ti­mates:

  • Price elas­tic­ity of eggs: the num­ber is taken from a liter­a­ture re­view which es­ti­mated this num­ber from a sam­ple size of 13 (some other food prod­ucts have a sam­ple size of ~50). There­fore, the ex­pected per­centage de­crease in cage-eggs might be wrong;

  • Ex­trap­o­la­tion of the his­tor­i­cal trend could be wrong;

  • Round­ing er­rors: for ex­am­ple, ob­served change is 8.67 but rounded to 9;

  • Price of cage-eggs be­fore and af­ter avian flu was difficult to es­ti­mate: an av­er­age of USDA bench­mark prices over the May-De­cem­ber pe­riod of 2014 and 2015 was used as one of the three sources to find these prices, the num­ber of re­ports in this time pe­riod varied (there were 9 re­ports in 2014 and 5 re­ports in 2015, so there was a larger sam­ple size in 2014);

  • Per­centage of peo­ple who won’t pur­chase eggs af­ter the price in­crease of cage-eggs could be too small; maybe more would switch to cage-free in­stead.

Conclusion

The pres­ence of all an­a­lyzed fac­tors, if no other fac­tors play a role, would re­sult in 6% of all eggs in the US be­ing cage-free. How­ever, we can ob­serve that ~16% of eggs pro­duced in the US are cage-free eggs, which means that the effects of other fac­tors re­sult in an ad­di­tional 10.4% of cage-free eggs. This could be ex­plained by cor­po­rate out­reach (or other known and un­known fac­tors, e.g. change in leg­is­la­tion that in­creased the prob­a­bil­ity of the suc­cess of the cam­paign). There­fore, we at­tribute the coun­ter­fac­tual im­pact of cor­po­rate cam­paigns to be be­tween 2.1-10% of eggs be­ing switched to cage-free. We are not go­ing to use this num­ber in the cost-effec­tive­ness anal­y­sis sep­a­rately from other fac­tors. We plan on pub­lish­ing an anal­y­sis of ex­pected suc­cess of launch­ing new cor­po­rate cam­paign, and this piece is only a sup­ple­men­tary el­e­ment to the big­ger re­search on cor­po­rate out­reach.

Although we will not do this our­selves, we would love to see a similar anal­y­sis for a differ­ent coun­try, and we sug­gest the UK given the availa­bil­ity of data. If any­one is in­ter­ested in do­ing so, we would love to send you any data we might have to help get you started. We gath­ered data on the rel­a­tive share and num­ber of cage free-cage eggs in the UK and it can be found here.