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Risk-learning process in forming willingness-to-pay for egg safety

Atsushi Maruyama and Masao Kikuchi
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Atsushi Maruyama: Department of Agricultural Economics, Faculty of Horticulture, Chiba University, Chiba 271-8510, Japan. E-mail: a.maruyama@faculty.chiba-u.jp, Postal: Department of Agricultural Economics, Faculty of Horticulture, Chiba University, Chiba 271-8510, Japan. E-mail: a.maruyama@faculty.chiba-u.jp

Agribusiness, 2004, vol. 20, issue 2, 167-179

Abstract: Using data obtained from a mail survey on consumers' willingness-to-pay (WTP) and risk beliefs for reducing the risk of salmonella contamination of eggs, we have examined the risk-learning process through which individuals form their WTP. The results of estimation of the WTP function support the hypothesis that respondents follow an adaptive learning process, in which they establish their posterior risk belief in a rational manner by adapting their prior risk belief as they are supplied with new risk information. We find that the weight of the prior risk belief is slightly smaller than that of new risk information in forming the posterior risk belief for three out of four estimation models. Knowledge of how consumers form their risk beliefs and who evaluates egg safety enables us to clearly specify targets for effective campaigns to enhance public awareness at a household level about health and food safety issues. [EconLit citations: D120, Q260.] © 2004 Wiley Periodicals, Inc. Agribusiness 20: 167-179, 2004.

Date: 2004
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