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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.

Suggested Citation

  • Marette, Stéphan & Roe, Brian E. & Teisl, Mario, 2012. "The welfare impact of food pathogen vaccines," Food Policy, Elsevier, vol. 37(1), pages 86-93.
  • Handle: RePEc:eee:jfpoli:v:37:y:2012:i:1:p:86-93
    DOI: 10.1016/j.foodpol.2011.11.002
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    References listed on IDEAS

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    1. 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.
    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. 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.
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    7. 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.
    8. 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).
    9. 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.
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    Cited by:

    1. Yang, Ruoye & Raper, Kellie Curry & Lusk, Jayson L., 2017. "The Impact of Hormone Use Perception on Consumer Meat Preference," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252772, Southern Agricultural Economics Association.
    2. Ochieng’, Brian J. & Hobbs, Jill E., 2016. "Incentives for cattle producers to adopt an E. Coli vaccine: An application of best–worst scaling," Food Policy, Elsevier, vol. 59(C), pages 78-87.
    3. Petrolia, Daniel R., 2016. "Risk preferences, risk perceptions, and risky food," Food Policy, Elsevier, vol. 64(C), pages 37-48.
    4. Rouvière, Elodie, 2016. "Small is beautiful: firm size, prevention and food safety," Food Policy, Elsevier, vol. 63(C), pages 12-22.
    5. Michael J. Peel, 2014. "Addressing unobserved endogeneity bias in accounting studies: control and sensitivity methods by variable type," Accounting and Business Research, Taylor & Francis Journals, vol. 44(5), pages 545-571, October.

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