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Valuing Food Safety in Experimental Auction Markets
Author(s) -
Hayes Dermot J.,
Shogren Jason F.,
Shin Seung Youll,
Kliebenstein James B.
Publication year - 1995
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1243887
Subject(s) - willingness to pay , affect (linguistics) , value (mathematics) , perception , food safety , quality (philosophy) , microeconomics , economics , marginal utility , experimental economics , marginal value , value of information , range (aeronautics) , business , actuarial science , marketing , econometrics , psychology , statistics , medicine , mathematics , philosophy , materials science , communication , epistemology , pathology , neuroscience , composite material , mathematical economics
In this paper, we value food safety in a nonhypothetical setting—experimental auction markets. First, subjects underestimate the relatively low probabilities of food‐borne illness. Second, measures of value are within a relatively flat range across a wide range of risks, even with repeated market experience and full information on the objective probability and severity of illness, suggesting subjects rely on prior perceptions. Third, marginal willingness to pay decreases as risk increases, suggesting that the perceived quality of new information can affect the weight the individuals place on the information. Finally, pathogen‐specific values seem to act as surrogates for general food safety preferences.