Risk Valuation in the Presence of Risky Substitutes: An Application to Demand for SeafoodJu-Chin Huang (), Tim Haab () and John C. Whitehead () Journal of Agricultural & Applied Economics, 2004, vol. 36, issue 1, pages 213-228 Abstract: In this paper, we attempt to value health risks by combining traditional demand impact analysis with direct elicitation of individuals' risk perceptions of food safety. We examine the impact of multiple risks of related goods on consumption of a risky good. We argue that the consumption of a risky good depends on both its absolute risk level and its relative risks to other risky goods. Seafood consumption in eastern North Carolina is studied. We elicit, in a survey, individual perceived risks as reference points to derive the economic value of reducing health risk in seafood consumption. Revealed and stated data are combined to trace out demand changes in response to absolute and relative risk reductions. Our results show that seafood consumption is affected by the perceived absolute risk and by the relative risk to poultry and that individuals react to the multiple risks in a nonlinear way--as suggested by our analytical model. Keywords: absolute and relative risks; food borne health risk; revealed and stated data; risk substitutes (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Access Statistics for this article Journal of Agricultural & Applied Economics is edited by Jeffrey M. Gillespie More articles in Journal of Agricultural & Applied Economics from Southern Agricultural Economics Association |
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