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Willingness-to-Pay for Oyster Consumption Mortality Risk Reductions

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  • John C. Whitehead
  • O. Ashton Morgan
  • William L. Huth
  • Gregory S. Martin
  • Richard Sjolander

Abstract

In this paper we use data from an internet-based survey and estimate the benefits of an oyster consumption safety policy with the contingent valuation method. In addition to providing a context specific estimate of willingness-to-pay for oyster safety, we consider two unresolved issues in the contingent valuation health risk literature. First, a number of studies in the mortality risk reduction literature find that willingness-to-pay is not sensitive to the scope of the risk change. We present the scope test as a difference in the number of lives saved by the program, instead of small changes in risk, and that referendum votes are responsive to scope. Second, we identify those at risk respondents who would actually benefit from the policy and decompose willingness-to-pay into personal mortality risk reduction values and altruistic willingness-to-pay. We find that respondents are sensitive to the scope of the policy and most at-risk respondents are willing to pay even more. We find that willingness-to-pay per life saved is $1.28 million for the pure private good of own-risk reduction. Willingness-to-per per life saved including private values and public, altruistic nonuse values is $5.92 million. Altruistic values are the major component of willingness-to-pay. Key Words: contingent valuation, scope test, altruism, seafood safety, health risk, oyster

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File URL: http://econ.appstate.edu/RePEc/pdf/wp1207.pdf
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Bibliographic Info

Paper provided by Department of Economics, Appalachian State University in its series Working Papers with number 12-07.

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Date of creation: 2012
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Handle: RePEc:apl:wpaper:12-07

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Web page: http://www.business.appstate.edu/departments/economics/
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  1. Corso, Phaedra S & Hammitt, James K & Graham, John D, 2001. " Valuing Mortality-Risk Reduction: Using Visual Aids to Improve the Validity of Contingent Valuation," Journal of Risk and Uncertainty, Springer, vol. 23(2), pages 165-84, September.
  2. Huang, Ju-Chin & Haab, Timothy C. & Whitehead, John C., 2004. "Risk Valuation in the Presence of Risky Substitutes: An Application to Demand for Seafood," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 36(01), April.
  3. John Loomis, 2011. "What'S To Know About Hypothetical Bias In Stated Preference Valuation Studies?," Journal of Economic Surveys, Wiley Blackwell, vol. 25(2), pages 363-370, 04.
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  17. 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.
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  1. "CVM Cold"
    by John Whitehead in Environmental Economics on 2013-04-18 12:37:01

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