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The Welfare Effects of Pfiesteria-Related Fish Kills in Seafood Markets: A Contingent Behavior Analysis

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Listed:
  • George R. Parsons
  • Ash O. Morgan
  • John C. Whitehead
  • Timothy C. Haab

Abstract

We use contingent behavior analysis to study the effects of Pfiesteria related fish kills on the demand for seafood in the Mid-Atlantic region. We use a phone-mail-phone survey to look at the effects of various information provision mechanisms used to ameliorate the effects of misinformation regarding fish kills. A set of demand difference models are estimated based on individual responses to multiple questions about seafood consumption with and without fish kills present and with various health risk information treatments. Random effects Tobit models are used to control for the panel nature of responses and natural censoring of the stated responses. We find that 1) Pfiesteria related fish kills have a significant negative effect on the demand for seafood, 2) seafood consumers are nonresponsive to expert risk information designed to reassure consumers that seafood is safe in the presence of a fish kill, and 3) a mandatory seafood inspection program completely eliminates avoidance costs incurred due to misinformation. We estimate that the aggregate avoidance costs incurred in the month immediately following a Pfiesteria related fish kill is $50-$130 million.

Suggested Citation

  • George R. Parsons & Ash O. Morgan & John C. Whitehead & Timothy C. Haab, 2005. "The Welfare Effects of Pfiesteria-Related Fish Kills in Seafood Markets: A Contingent Behavior Analysis," Working Papers 05-01, Department of Economics, Appalachian State University.
    • Handle: RePEc:apl:wpaper:05-01
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    File URL: http://econ.appstate.edu/RePEc/pdf/wp0501.pdf
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    References listed on IDEAS

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    1. Mark E. Smith & Eileen O. van Ravenswaay & Stanley R. Thompson, 1988. "Sales Loss Determination in Food Contamination Incidents: An Application to Milk Bans in Hawaii," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(3), pages 513-520.
    2. David G. Swartz & Ivar E. Strand, Jr., 1981. "Avoidance Costs Associated with Imperfect Information: The Case of Kepone," Land Economics, University of Wisconsin Press, vol. 57(2), pages 139-150.
    3. Robert N. Shulstad & Herbert H. Stoevener, 1978. "The Effects of Mercury Contamination in Pheasants on the Value of Pheasant Hunting in Oregon," Land Economics, University of Wisconsin Press, vol. 54(1), pages 39-49.
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      by John Whitehead in Environmental Economics on 2009-07-09 19:23:09

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    1. O. Ashton Morgan & John C. Whitehead & William L. Huth, 2016. "Accounting for heterogeneity in behavioural responses to health-risk information treatments," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 5(3), pages 283-297, September.
    2. O. Ashton Morgan & Gregory S. Martin & William L. Huth, 2009. "Oyster Demand Adjustments to Counter-Information and Source Treatments in Response to Vibrio vulnificus," Working Papers 09-08, Department of Economics, Appalachian State University.

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    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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