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Informational Regulation of Consumer Health Risks: An Empirical Evaluation of Hazard Warnings

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  • W. Kip Viscusi
  • Wesley A. Magat
  • Joel Huber

Abstract

On the basis of data from a survey of almost 400 consumers, this article assesses whether consumer behavior is responsive to information about product hazards that is provided in response to regulation. We find that the extent to which consumers take precautions is consistent with the level of risk indicated, the amount of risk information, the specific risk and precaution indicated, and the economic benefits of safety precautions. We also use the patterns of precautionary behavior to analyze the implicit value of the morbidity effects and to assess the consistency of consumer choices. Our findings support the use of product-hazard information as an alternative to more direct regulation of safety risks.

Suggested Citation

  • W. Kip Viscusi & Wesley A. Magat & Joel Huber, 1986. "Informational Regulation of Consumer Health Risks: An Empirical Evaluation of Hazard Warnings," RAND Journal of Economics, The RAND Corporation, vol. 17(3), pages 351-365, Autumn.
  • Handle: RePEc:rje:randje:v:17:y:1986:i:autumn:p:351-365
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    Cited by:

    1. Glynn T. Tonsor & Ted C. Schroeder & Joost M. E. Pennings, 2009. "Factors Impacting Food Safety Risk Perceptions," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(3), pages 625-644.
    2. Shimshack, Jay P. & Ward, Michael B. & Beatty, Timothy K.M., 2007. "Mercury advisories: Information, education, and fish consumption," Journal of Environmental Economics and Management, Elsevier, vol. 53(2), pages 158-179, March.
    3. Vincenzo Carrieri & Ansgar Wuebker, 2016. "Quasi-Experimental Evidence on the Effects of Health Information on Preventive Behaviour in Europe," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(6), pages 765-791, December.
    4. Cameron, Trudy Ann, 2005. "Individual option prices for climate change mitigation," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 283-301, February.
    5. Collins, J. Michael & Simon, Kosali I. & Tennyson, Sharon, 2013. "Drug withdrawals and the utilization of therapeutic substitutes: The case of Vioxx," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 148-168.
    6. repec:spr:jopoec:v:31:y:2018:i:2:d:10.1007_s00148-017-0660-1 is not listed on IDEAS
    7. Graff Zivin, Joshua & Neidell, Matthew, 2009. "Days of haze: Environmental information disclosure and intertemporal avoidance behavior," Journal of Environmental Economics and Management, Elsevier, vol. 58(2), pages 119-128, September.
    8. Konishi, Yoshifumi & Coggins, Jay S., 2008. "Environmental risk and welfare valuation under imperfect information," Resource and Energy Economics, Elsevier, vol. 30(2), pages 150-169, May.
    9. Trudy Cameron, 2005. "Updating Subjective Risks in the Presence of Conflicting Information: An Application to Climate Change," Journal of Risk and Uncertainty, Springer, vol. 30(1), pages 63-97, January.
    10. Villas-Boas, Sofia B & Toledo, Chantal, 2016. "Safe or Not? Consumer Responses to Recalls with Traceability," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt2348568h, Department of Agricultural & Resource Economics, UC Berkeley.
    11. Jay Shimshack, 2004. "Are Mercury Advisories Effective? Inofrmation, Education, and Fish Consumption," Discussion Papers Series, Department of Economics, Tufts University 0423, Department of Economics, Tufts University.
    12. Bennear, Lori S. & Olmstead, Sheila M., 2008. "The impacts of the "right to know": Information disclosure and the violation of drinking water standards," Journal of Environmental Economics and Management, Elsevier, vol. 56(2), pages 117-130, September.
    13. Carrieri, V.; & Principe, F.;, 2018. "WHO and for how long? An empirical analysis of the consumers’ response to red meat warning," Health, Econometrics and Data Group (HEDG) Working Papers 18/08, HEDG, c/o Department of Economics, University of York.

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