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An experimental store was created to evaluate initial demand for locally produced and guaranteed tender steak products as a more realistic alternative to contingent valuation (CV) and dichotomous‐choice experimental methods. Strengths of the approach are incentive compatibility, a realistic consumption set, and a familiar choice environment. Consumers selected among USDA Choice, premium quality, lean, guaranteed tender and locaily produced strip steaks. A double‐hurdle count data model indicated initial willingness‐to‐pay (WTP) for locally produced steak comparable to prior CV results, but demand was highly elastic. Demand for premium quality steak crowded out demand for the guaranteed tender product, contrasting with prior dichotomous‐choice experimental results.

‘Contraction and convergence’ is an ambitious yet widely supported plan to harmonise global greenhouse gas emissions to a safe and sustainable level per person within the next few decades. It was conceived in the mid-1990s by the Global Commons Institute (GCI) in London as an antidote to the expanding, diverging and climate-changing nature of global economic development. The plan is now at the core of the UN Framework Convention on Climate Change, has been approved by the European Parliament and many other governments and in July 2004 even received divine backing from the Church of England. GCI director Aubrey Meyer explains the background and defining characteristics of what could prove to be the ultimate sustainability initiative.

An experimental store was created to evaluate initial demand for locally produced and guaranteed tender steak products as a more realistic alternative to contingent valuation (CV) and dichotomous-choice experimental methods. Strengths of the approach are incentive compatibility, a realistic consumption set, and a familiar choice environment. Consumers selected among USDA Choice, premium quality, lean, guaranteed tender and IocaIly produced strip steaks. A double-hurdle count data model indicated initial willingness-to-pay (WTP) for locally produced steak comparable to prior CV results, but demand was highly elastic. Demand for premium quality steak crowded out demand for the guaranteed tender product, contrasting with prior dichotomous-choice experimental results.

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A stochastic budget simulator and generalized stochastic dominance are used to compare the risk management properties of grazing contracts to futures and option contracts. The results show that the risks of backgrounding feeder cattle are reduced significantly for pasture owners in a grazing contract. However, the risks of the cattle owner in a grazing contract are not significantly reduced. The results also show that generally risk averse pasture owners prefer grazing contracts to integrated production when traditional hedging is used to manage price risks. In addition, grazing contracts compare favorably with put option contracts for some pasture owners.

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