IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

What Extent of Welfare Loss is Caused by the Disparity between Perceived and Scientific Risks? A Case Study of Food Irradiation

Listed author(s):
  • Watanabe Masahide

    ()

    (Department of Economics, Osaka University of Economics, 2-2-8 Osumi Higashiyodogawa-ku, Osaka 533-8533, Japan)

  • Kawata Yukichika

    ()

    (Faculty of Economics, Kindai University, 4-1 Kowakae 3-chome, Higashiosaka, Osaka 577-8502, Japan)

An individual perceived risk often differs from an objective risk based on the scientific evidence; risks about nuclear power generation and food technology including genetic modification and food irradiation are typical such cases. However, the extent to which welfare loss is caused by the disparity between perceived and scientific risks is unclear. Based on this gap in the literature, we conduct a discrete choice experiment to estimate the welfare loss. At the same time, we must tackle two issues arising in the estimation: endogeneity and ambiguity in the perceived risk. We construct an empirical model based on maxmin expected utility to consider ambiguity and apply a control function approach to alleviate endogeneity bias. The results show that 1) the disparity between perceived and scientific risks causes a significant welfare loss; 2) the ambiguity in the perceived risk exacerbates the welfare loss; and 3) endogeneity largely biases welfare measurement.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: https://www.degruyter.com/view/j/bejeap.2017.17.issue-1/bejeap-2016-0071/bejeap-2016-0071.xml?format=INT
Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.

Volume (Year): 17 (2017)
Issue (Month): 1 (February)
Pages: 1-17

as
in new window

Handle: RePEc:bpj:bejeap:v:17:y:2017:i:1:p:17:n:5
Contact details of provider: Web page: https://www.degruyter.com

Order Information: Web: https://www.degruyter.com/view/j/bejeap

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Henson, Spencer, 1995. "Demand-side constraints on the introduction of new food technologies: The case of food irradiation," Food Policy, Elsevier, vol. 20(2), pages 111-127, April.
  2. 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.
  3. Hayes, D. J. & Fox, J. A. & Shogren, J. F., 2002. "Experts and activists: how information affects the demand for food irradiation," Food Policy, Elsevier, vol. 27(2), pages 185-193, April.
  4. Fox, John A & Hayes, Dermot J & Shogren, Jason F, 2002. "Consumer Preferences for Food Irradiation: How Favorable and Unfavorable Descriptions Affect Preferences for Irradiated Pork in Experimental Auctions," Journal of Risk and Uncertainty, Springer, vol. 24(1), pages 75-95, January.
  5. Kivi, Paul A. & Shogren, Jason F., 2010. "Second-Order Ambiguity in Very Low Probability Risks: Food Safety Valuation," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(3), December.
  6. Xuepeng Liu & Mary E. Lovely & Jan Ondrich, 2017. "The Location Decisions Of Foreign Investors In China: Untangling The Effect Of Wages Using A Control Function Approach," World Scientific Book Chapters,in: International Economic Integration and Domestic Performance, chapter 11, pages 191-197 World Scientific Publishing Co. Pte. Ltd..
  7. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, December.
  8. Jason F. Shogren & John A. Fox & Dermot J. Hayes & Jutta Roosen, 1999. "Observed Choices for Food Safety in Retail, Survey, and Auction Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1192-1199.
  9. Riddel, Mary, 2011. "Uncertainty and measurement error in welfare models for risk changes," Journal of Environmental Economics and Management, Elsevier, vol. 61(3), pages 341-354, May.
  10. Johansson-Stenman, Olof, 2008. "Mad cows, terrorism and junk food: Should public policy reflect perceived or objective risks?," Journal of Health Economics, Elsevier, vol. 27(2), pages 234-248, March.
  11. Mary Riddel & W. Shaw, 2006. "A theoretically-consistent empirical model of non-expected utility: An application to nuclear-waste transport," Journal of Risk and Uncertainty, Springer, vol. 32(2), pages 131-150, March.
  12. Misra, Sukant K. & Fletcher, Stanley M. & Huang, Chung L., 1995. "Chapter 20: IRRADIATION AND FOOD SAFETY: CONSUMER ATTITUDES AND AWARENESS," Valuing Food Safety and Nutrition (1995), Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance, number 25974.
  13. Camerer, Colin & Weber, Martin, 1992. "Recent Developments in Modeling Preferences: Uncertainty and Ambiguity," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 325-370, October.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:17:y:2017:i:1:p:17:n:5. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.