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Relating Consumer Willingness‐to‐Pay for Food Safety to Risk Tolerance: An Experimental Approach

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  • Jennifer Brown
  • John A. L. Cranfield
  • Spencer Henson

Abstract

This study investigates the role of risk tolerance in shaping Canadian consumers' willingness‐to‐pay for food safety risk reductions. Non‐hypothetical experimental auctions were used to elicit consumer valuations of food safety improvement. To identify the relationship between food safety concern and risk‐reduction valuations, individual risk‐perception scores are constructed based on questionnaire responses. Results show willingness‐to‐pay for improved food safety tends to decrease as individuals become more risk tolerant. Differences in bids across naïve and informed rounds of bidding tend to become smaller with risk tolerance for individuals who initially overestimated the food safety risk. La présente étude a examiné le rôle que joue la tolérance à l'égard du risque dans la volonté de payer des consommateurs canadiens pour diminuer les risques concernant la sécurité alimentaire. Nous avons organisé des enchères expérimentales non hypothétiques pour obtenir l'évaluation des consommateurs concernant l'amélioration de la sécurité alimentaire. Pour déterminer le lien entre l'inquiétude concernant la sécurité alimentaire et l'évaluation de la diminution du risque, nous avons utilisé les scores individuels sur la perception du risque calculés à partir d'un questionnaire. Les résultats ont montré que la volonté de payer pour obtenir une sécurité alimentaire accrue tend à diminuer à mesure que les consommateurs deviennent plus tolérants à l'égard du risque. Les différences d'offres des enchères naïves et informées tendaient à diminuer avec la tolérance à l'égard du risque pour les individus qui, au départ, avaient surestimé le risque liéà la sécurité alimentaire.

Suggested Citation

  • Jennifer Brown & John A. L. Cranfield & Spencer Henson, 2005. "Relating Consumer Willingness‐to‐Pay for Food Safety to Risk Tolerance: An Experimental Approach," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(2‐3), pages 249-263, June.
    • Handle: RePEc:bla:canjag:v:53:y:2005:i:2-3:p:249-263
    DOI: 10.1111/j.1744-7976.2005.00356.x
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    References listed on IDEAS

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    1. Frenzen, Paul D. & Buzby, Jean C. & Rasco, Barbara, 2001. "Product Liability And Microbial Foodborne Illness," Agricultural Economic Reports 34059, United States Department of Agriculture, Economic Research Service.
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    2. Johnson, Rutherford & Vickner, Steven S. & Pagoulatos, Angelos & Debertin, David L., 2006. "Health Media Coverage and Consumer Choice: A Panel Data Econometric Analysis of the Domestic Cracker Market," 2006 Annual meeting, July 23-26, Long Beach, CA 21110, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Sckokai, Paolo & Veneziani, Mario & Moro, Daniele & Castellari, Elena, 2014. "Consumer willingness to pay for food safety: the case of mycotoxins in milk," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 3(1), pages 1-19, April.
    4. Giraud-Heraud, Eric & Grazia, Cristina & Hammoudi, Abdelhakim, 2010. "On The Effectiveness Of Private Food Standards," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116408, European Association of Agricultural Economists.
    5. Waldman, Kurt B. & Kerr, John M., 2015. "Is Food and Drug Administration policy governing artisan cheese consistent with consumers’ preferences?," Food Policy, Elsevier, vol. 55(C), pages 71-80.
    6. Kassas, Bachir & Palma, Marco A. & Anderson, David P., 2018. "Fine-tuning willingness-to-pay estimates in second price auctions for market goods," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 77(C), pages 50-61.
    7. Oluwagbenga Akinwehinmi & Kolawole Ogundari & Taye Timothy Amos, 2022. "Consumers’ food control risk perception and preference for food safety certification in emerging food markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(3), pages 690-708, September.
    8. Eric Giraud-Héraud & Cristina Grazia & Abdelhakim Hammoudi, 2012. "Explaining the Emergence of Private Standards in Food Supply Chains," Working Papers hal-00749345, HAL.
    9. Tran, Van & Yiannaka, Amalia & Giannakas, Konstantinos, 2016. "Consumer Perceptions And Willingness-To-Pay For Nanotechnology Applications That Enhance Food Safety," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235918, Agricultural and Applied Economics Association.
    10. Straub, Matthew O. & Thomassin, Paul J., 2006. "Product Attributes and Consumer Willingness to Pay for Environmental Management Systems in Agriculture: Using the Choice Modeling Technique," 2006 Annual meeting, July 23-26, Long Beach, CA 21051, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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