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Pesticide Residue Risk and Food Safety Valuation: A Random Utility Approach

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  • Young Sook Eom

Abstract

A new approach is developed for integrating consumers' risk perceptions with stated purchase behavior when consumption decisions must be made with incomplete information. The application involves health risks from exposure to pesticide residues on fresh produce. Unlike traditional food demand analysis, the present approach treats produce choices as discrete outcomes, resulting in a random utility model. Empirical results from a pilot survey suggest a clear linkage between perceptions and behavior in response to new risk information. Consumers' stated preferences for safer produce were primarily influenced by price differences and perceived risks, not by the technical risk information provided alone. However, the linkage between behavior and valuation was less clear cut. The risk/price tradeoffs entailed by contingent discrete choices indicate high price premia for small risk reductions and little variation in price premium across alternative risk reductions.

Suggested Citation

  • Young Sook Eom, 1994. "Pesticide Residue Risk and Food Safety Valuation: A Random Utility Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(4), pages 760-771.
    • Handle: RePEc:oup:ajagec:v:76:y:1994:i:4:p:760-771.
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    File URL: http://hdl.handle.net/10.2307/1243737
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    Cited by:

    1. Govindasamy, Ramu & Italia, John & Liptak, Clare, 1997. "Quality of Agricultural Produce: Consumer Preferences and Perceptions," P Series 36739, Rutgers University, Department of Agricultural, Food and Resource Economics.
    2. Bo Xiong & John Beghin, 2017. "Disentangling Demand-Enhancing And Trade-Cost Effects Of Maximum Residue Regulations," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 6, pages 105-108 World Scientific Publishing Co. Pte. Ltd..
    3. Huang, Ju-Chin & Haab, Timothy C. & Whitehead, John C., 2001. "Absolute Versus Relative Risk Perceptions: An Application To Economic Values Of Seafood Safety," 2001 Annual meeting, August 5-8, Chicago, IL 20731, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Kevin Boyle & Sapna Kaul & Ali Hashemi & Xiaoshu Li, 2015. "Applicability of benefit transfers for evaluation of homeland security counterterrorism measures," Chapters,in: Benefit–Cost Analyses for Security Policies, chapter 10, pages 225-253 Edward Elgar Publishing.
    5. Bocker, Andreas & Hanf, Claus-Hennig, 2000. "Confidence lost and -- partially -- regained: consumer response to food scares," Journal of Economic Behavior & Organization, Elsevier, vol. 43(4), pages 471-485, December.
    6. Ju-Chin Huang & Timothy C. Haab & John C. Whitehead, 2000. "“Absolute versus Relative Risk Perception: An Application to Seafood Safety,”," Working Papers 0010, East Carolina University, Department of Economics.
    7. Govindasamy, Ramu & Italia, John & Adelaja, Adesoji O., 2001. "Predicting Willingness-To-Pay A Premium For Integrated Pest Management Produce: A Logistic Approach," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 0(Number 2), pages 1-9, October.
    8. Erik Magnusson & J. A. L. Cranfield, 2005. "Consumer Demand for Pesticide Free Food Products in Canada: A Probit Analysis," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(1), pages 67-81, March.
    9. Featherstone, Allen M. & Klein, Nicole L., 1997. "A Nonparametric Analysis of Efficiency for a Beefpacking Firm: Implications of Federal Food Safety Regulations," 1997 Annual Meeting, July 13-16, 1997, Reno\ Sparks, Nevada 35805, Western Agricultural Economics Association.
    10. repec:eee:ijrema:v:25:y:2008:i:4:p:310-318 is not listed on IDEAS
    11. Vivien Foster & Susana Mourato, 2000. "Valuing the Multiple Impacts of Pesticide Use in the UK: A Contingent Ranking Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(1), pages 1-21.
    12. Tsu-Tan Fu & Jin-Tan Liu & James K. Hammitt, 1999. "Consumer Willingness to Pay for Low-Pesticide Fresh Produce in Taiwan," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(2), pages 220-233.

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