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The welfare impact of food pathogen vaccines

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  • Marette, Stéphan
  • Roe, Brian E.
  • Teisl, Mario

Abstract

Vaccines against several common foodborne pathogens are being developed and could substantially alter the policy tools available to address foodborne illness. However, little analysis is available to suggest how social welfare would be affected by consumer and industry responses to these new vaccines. To address this void, we use stated-preference data to estimate consumer willingness to pay (WTP) for food safety vaccines and then simulate the welfare impacts of subsidizing consumer purchases of the vaccine given two different industry responses: maintaining current levels of food safety vigilance and reducing food safety vigilance due to a moral hazard response that undermines consumer confidence in food safety. To obtain consumer preferences for the vaccine, we simultaneously estimate a three-equation model that recognizes the recursive nature of responses to questions probing respondents’ willingness to purchase vaccines and perceptions of the probability and severity of possible foodborne illness incidents and the joint distribution of unobservable components. Our simulations show large consumer WTP if vaccines are relatively inexpensive while the presence of moral hazard increases respondents’ willingness to pay and voluntary uptake of vaccine.

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Bibliographic Info

Article provided by Elsevier in its journal Food Policy.

Volume (Year): 37 (2012)
Issue (Month): 1 ()
Pages: 86-93

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Handle: RePEc:eee:jfpoli:v:37:y:2012:i:1:p:86-93

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Web page: http://www.elsevier.com/locate/foodpol

Related research

Keywords: Vaccination; Food safety; Stated preference; Moral hazard; Willingness-to-pay;

References

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  1. Mukhopadhaya, Kaushik & Adhikari, Bishwa B. & Mumma, Gerald A. & Teisl, Mario F., 2004. "Consumers' Willingness To Pay For Food Safety: A Pathogen Specific Analysis," 2004 Annual meeting, August 1-4, Denver, CO 20064, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Teisl, Mario F. & Roe, Brian & Mumma, Gerald, 2007. "One Step Forward: Consumer Reactions to Food-Safety Technologies," Journal of Food Distribution Research, Food Distribution Research Society, vol. 38(1), March.
  3. Joseph Cook & Marc Jeuland & Brian Maskery & Donald Lauria & Dipika Sur & John Clemens & Dale Whittington, 2009. "Using private demand studies to calculate socially optimal vaccine subsidies in developing countries," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 28(1), pages 6-28.
  4. Mark M. Pitt & Shahidur R. Khandker, 1998. "The Impact of Group-Based Credit Programs on Poor Households in Bangladesh: Does the Gender of Participants Matter?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 958-996, October.
  5. Cropper, Maureen L. & Haile, Mitiku & Lampietti, Julian & Poulos, Christine & Whittington, Dale, 2004. "The demand for a malaria vaccine: evidence from Ethiopia," Journal of Development Economics, Elsevier, vol. 75(1), pages 303-318, October.
  6. S. Andrew Starbird, 2005. "Moral Hazard, Inspection Policy, and Food Safety," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 15-27.
  7. Geoffard, Pierre-Yves & Philipson, Tomas, 1997. "Disease Eradication: Private versus Public Vaccination," American Economic Review, American Economic Association, vol. 87(1), pages 222-30, March.
  8. Smith, V. Kerry & Kaoru, Yoshiaki, 1986. "Modeling recreation demand within a random utility framework," Economics Letters, Elsevier, vol. 22(4), pages 395-399.
  9. Teisl, Mario F. & Roe, Brian E., 2010. "Consumer willingness-to-pay to reduce the probability of retail foodborne pathogen contamination," Food Policy, Elsevier, vol. 35(6), pages 521-530, December.
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