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Perceived Hazard and Product Choice: An Application to Recreational Site Choice

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  • Jakus, Paul M
  • Shaw, W Douglass

Abstract

We develop a "perceived hazard" model that estimates consumers' endogenous risk perceptions about products. These perceptions are then linked to a model of product choice. Our approach thus departs from the expected utility model that depends upon external risk assessments. In an application to recreational fishing, we find that anglers' perceived hazards associated with fish consumption advisories do affect product (recreational site) choice. Anglers' perceptions also affect welfare measures because the benefits of contaminant removal flow from these perceptions. The perceived hazard/product choice model is applicable to a wide variety of risky choices consumers face. Copyright 2003 by Kluwer Academic Publishers

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  • Jakus, Paul M & Shaw, W Douglass, 2003. "Perceived Hazard and Product Choice: An Application to Recreational Site Choice," Journal of Risk and Uncertainty, Springer, vol. 26(1), pages 77-92, January.
  • Handle: RePEc:kap:jrisku:v:26:y:2003:i:1:p:77-92
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    1. Mark Montgomery & Michael Needelman, 1997. "The Welfare Effects of Toxic Contamination in Freshwater Fish," Land Economics, University of Wisconsin Press, vol. 73(2), pages 211-223.
    2. Morey, Edward R. & Waldman, Donald M., 1998. "Measurement Error in Recreation Demand Models: The Joint Estimation of Participation, Site Choice, and Site Characteristics," Journal of Environmental Economics and Management, Elsevier, vol. 35(3), pages 262-276, May.
    3. Parsons, George R. & Jakus, Paul M. & Tomasi, Ted, 1999. "A Comparison of Welfare Estimates from Four Models for Linking Seasonal Recreational Trips to Multinomial Logit Models of Site Choice," Journal of Environmental Economics and Management, Elsevier, vol. 38(2), pages 143-157, September.
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    6. W. Douglas Shaw & J. Scott Shonkwiler, 2000. "Brand Choice and Purchase Frequency Revisited: An Application to Recreation Behavior," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 515-526.
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    8. Jill J. McCluskey & Gordon C. Rausser, 2001. "Estimation of Perceived Risk and Its Effect on Property Values," Land Economics, University of Wisconsin Press, vol. 77(1), pages 42-55.
    9. Viscusi, W Kip, 1989. "Prospective Reference Theory: Toward an Explanation of the Paradoxes," Journal of Risk and Uncertainty, Springer, vol. 2(3), pages 235-263, September.
    10. Krinsky, Itzhak & Robb, A Leslie, 1986. "On Approximating the Statistical Properties of Elasticities," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 715-719, November.
    11. Machina, Mark J, 1987. "Choice under Uncertainty: Problems Solved and Unsolved," Journal of Economic Perspectives, American Economic Association, vol. 1(1), pages 121-154, Summer.
    12. W. Kip Viscusi & Wesley A. Magat & Joel Huber, 1999. "Smoking Status and Public Responses to Ambiguous Scientific Risk Evidence," Southern Economic Journal, Southern Economic Association, vol. 66(2), pages 250-270, October.
    13. Jakus, Paul M. & Downing, Mark & Bevelhimer, Mark S. & Fly, J. Mark, 1997. "Do Sportfish Consumption Advisories Affect Reservoir Anglers’ Site Choice?," Agricultural and Resource Economics Review, Cambridge University Press, vol. 26(02), pages 196-204, October.
    14. Heng Z. Chen & Stephen R. Cosslett, 1998. "Environmental Quality Preference and Benefit Estimation in Multinomial Probit Models: A Simulation Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 512-520.
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    16. Chris Starmer, 2000. "Developments in Non-expected Utility Theory: The Hunt for a Descriptive Theory of Choice under Risk," Journal of Economic Literature, American Economic Association, vol. 38(2), pages 332-382, June.
    17. Paul M. Jakus & Dimitrios Dadakas & J. Mark Fly, 1998. "Fish Consumption Advisories: Incorporating Angler-Specific Knowledge, Habits, and Catch Rates in a Site Choice Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(5), pages 1019-1024.
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    1. repec:kap:enreec:v:70:y:2018:i:1:d:10.1007_s10640-017-0120-0 is not listed on IDEAS
    2. Haab, Timothy C. & Whitehead, John C. & Parsons, George R. & Price, Jammie, 2010. "Effects of information about invasive species on risk perception and seafood demand by gender and race," Resource and Energy Economics, Elsevier, vol. 32(4), pages 586-599, November.
    3. Robert J. Johnston & Eric T. Schultz & Kathleen Segerson & Elena Y. Besedin & Mahesh Ramachandran, 2012. "Enhancing the Content Validity of Stated Preference Valuation: The Structure and Function of Ecological Indicators," Land Economics, University of Wisconsin Press, vol. 88(1), pages 102-120.
    4. Thomas Lundhede & Jette Bredahl Jacobsen & Nick Hanley & Niels Strange & Bo Jellesmark Thorsen, 2015. "Incorporating Outcome Uncertainty and Prior Outcome Beliefs in Stated Preferences," Land Economics, University of Wisconsin Press, vol. 91(2), pages 296-316.
    5. Johnston, Robert J. & Schultz, Eric T. & Segerson, Kathleen & Besedin, Elena Y. & Ramachandran, Mahesh, 2013. "Stated Preferences for Intermediate versus Final Ecosystem Services: Disentangling Willingness to Pay for Omitted Outcomes," Agricultural and Resource Economics Review, Cambridge University Press, vol. 42(01), pages 98-118, April.
    6. Douglas J. MacNair & William H. Desvousges, 2007. "The Economics of Fish Consumption Advisories: Insights from Revealed and Stated Preference Data," Land Economics, University of Wisconsin Press, vol. 83(4), pages 600-616.
    7. Krupnick, Alan & McGuinness, Meghan & Jakus, Paul, 2002. "The Benefits and Costs of Fish Consumption Advisories for Mercury," Discussion Papers dp-02-55, Resources For the Future.
    8. Cash, Sean B. & Lacanilao, Ryan D. & Adamowicz, Wiktor L. & Raine, Kim, 2008. "An Experimental Investigation of the Impact of Fat Taxes: Prices Effects, Food Stigma, and Information Effects on Economics Instruments to Improve Dietary Health," Consumer and Market Demand Network Papers 45499, University of Alberta, Department of Resource Economics and Environmental Sociology.
    9. Johnston, Robert J. & Segerson, Kathleen & Schultz, Eric T. & Besedin, Elena Y. & Ramachandran, Mahesh, 2011. "Indices of biotic integrity in stated preference valuation of aquatic ecosystem services," Ecological Economics, Elsevier, vol. 70(11), pages 1946-1956, September.
    10. Thomann, Christian & Pascalau, Razvan & Schulenburg, J.-Matthias Graf von der & Gas, Bruno, 2007. "Corporate Management of Highly Dynamic Risks: The Case of Terrorism Insurance in Germany," MPRA Paper 7221, University Library of Munich, Germany.

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