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The Welfare Effects of Pfiesteria-Related Fish Kills: A Contingent Behavior Analysis of Seafood Consumers

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Author Info

  • Parsons, George R.
  • Morgan, Ash
  • Whitehead, John C.
  • Haab, Timothy C.

Abstract

We use contingent behavior analysis to study the effects of pfiesteria-related fish kills on the demand for seafood in the Mid-Atlantic region. We estimate a set of demand difference models based on individual responses to questions about seafood consumption in the presence of fish kills and with different amounts of information provided about health risks. We use a random-effects Tobit model to control for correlation across each observation and to account for censoring. We find that (i) pfiesteria-related fish kills have a significant negative effect on the demand for seafood even though the fish kills pose no known threat to consumers through sea-food consumption, (ii) seafood consumers are not responsive to expert risk information designed to reassure them that seafood is safe in the presence of a fish kill, and (iii) a mandatory seafood inspection program largely eliminates the welfare loss incurred due to misinformation.

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File URL: http://purl.umn.edu/10205
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Bibliographic Info

Article provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.

Volume (Year): 35 (2006)
Issue (Month): 2 (October)
Pages:

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Handle: RePEc:ags:arerjl:10205

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Web page: http://www.narea.org/
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Related research

Keywords: pfiesteria; seafood demand; non-market valuation; Resource /Energy Economics and Policy;

References

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  1. W. Michael Hanemann, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall.
  2. Robert N. Shulstad & Herbert H. Stoevener, 1978. "The Effects of Mercury Contamination in Pheasants on the Value of Pheasant Hunting in Oregon," Land Economics, University of Wisconsin Press, vol. 54(1), pages 39-49.
  3. David G. Swartz & Ivar E. Strand, Jr., 1981. "Avoidance Costs Associated with Imperfect Information: The Case of Kepone," Land Economics, University of Wisconsin Press, vol. 57(2), pages 139-150.
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Cited by:
  1. Asche, Frank & Zhang, Dengjun, 2013. "Testing Structural Changes in the U.S. Whitefish Import Market: An Inverse Demand System Approach," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 42(3), December.
  2. O. Ashton Morgan & Gregory S. Martin & William L. Huth, 2009. "Oyster Demand Adjustments to Counter-Information and Source Treatments in Response to Vibrio vulnificus," Working Papers 09-08, Department of Economics, Appalachian State University.
  3. Timothy C. Haab & John C. Whitehead & George R. Parsons & Jammie Price, 2008. "Effects of Information about Invasive Species on Risk Perception and Seafood Demand by Gender and Race," Working Papers 08-02, Department of Economics, Appalachian State University.
  4. O. Ashton Morgan & John C. Whitehead & William L. Huth & Gregory S. Martin & Richard Sjolander, 2013. "Accounting for Heterogeneity in Behavioral Responses to Health-Risk Information Treatments," Working Papers 13-05, Department of Economics, Appalachian State University.
  5. O. Ashton Morgan & John C. Whitehead & William L. Huth & Gregory S. Martin & Richard Sjolander, 2013. "Measuring the Impact of the BP Deepwater Horizon Oil Spill on Consumer Behavior: Evidence from a Natural Experiment," Working Papers 13-11, Department of Economics, Appalachian State University.

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