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Measuring the Impact of Improved Traceability Information in Seafood Markets Following a Large Scale Contamination Event

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  • William L. Huth
  • O. Ashton Morgan
  • John C. Whitehead

Abstract

We fuse and jointly estimate revealed and stated preference data over the BP Deepwater Horizon oil spill time horizon to analyze the potential for a new seafood traceability system to mitigate long-run decreases in product demand following a major contamination event. Findings indicate that traceability information flows that provide more precise information to oyster consumers regarding the location of harvest ameliorate consumers’ perceived risk of eating oyster meals after the spill, leading to a significant increase in demand. Further, the magnitude of the increase is greater than the negative long-term post-spill effects, leading to overall welfare gains. However, any price increase associated with the information will mitigate the initial welfare gains. Overall, our findings suggest that the potential success of a new seafood traceability system depends on the implementation costs and the extent to which price increases are passed onto consumers. Key Words: Traceability, oyster consumers, consumer surplus, contamination event, risk preferences

Suggested Citation

  • William L. Huth & O. Ashton Morgan & John C. Whitehead, 2016. "Measuring the Impact of Improved Traceability Information in Seafood Markets Following a Large Scale Contamination Event," Working Papers 16-17, Department of Economics, Appalachian State University.
    • Handle: RePEc:apl:wpaper:16-17
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    References listed on IDEAS

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    1. Dickinson, David L. & Bailey, DeeVon, 2002. "Meat Traceability: Are U.S. Consumers Willing To Pay For It?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(2), pages 1-17, December.
    2. Parsons, George R. & Morgan, Ash & Whitehead, John C. & Haab, Timothy C., 2006. "The Welfare Effects of Pfiesteria-Related Fish Kills: A Contingent Behavior Analysis of Seafood Consumers," Agricultural and Resource Economics Review, Cambridge University Press, vol. 35(2), pages 348-356, October.
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    4. O. Ashton Morgan & John C. Whitehead & William L. Huth, 2016. "Accounting for heterogeneity in behavioural responses to health-risk information treatments," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 5(3), pages 283-297, September.
    5. Roheim, Cathy A. & Kline, Jeffrey D. & Anderson, Joan Gray, 1996. "Seafood Safety Perceptions And Their Effects On Anticipated Consumption Under Varying Information Treatments," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 25(1), pages 1-10, April.
    6. Jill E. Hobbs & DeeVon Bailey & David L. Dickinson & Morteza Haghiri, 2005. "Traceability in the Canadian Red Meat Sector: Do Consumers Care?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(1), pages 47-65, March.
    7. Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, vol. 52(4), pages 909-938, July.
    8. O. Morgan & John Whitehead & William Huth & Greg Martin & Richard Sjolander, 2013. "A Split-Sample Revealed and Stated Preference Demand Model to Examine Homogenous Subgroup Consumer Behavior Responses to Information and Food Safety Technology Treatments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 54(4), pages 593-611, April.
    9. 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.
    10. O. Ashton Morgan & John C. Whitehead & William L. Huth & Greg S. Martin & Richard Sjolander, 2016. "Measuring the Impact of the BP Deepwater Horizon Oil Spill on Consumer Behavior," Land Economics, University of Wisconsin Press, vol. 92(1), pages 82-95.
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    Keywords

    traceability; oyster consumers; consumer surplus; contamination event; risk preferences;
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