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

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  • Parsons, George R.
  • Morgan, Ash
  • Whitehead, John C.
  • Haab, Timothy C.

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 estimate a set of demand difference models based on individual responses to questions about seafood consumption in the presence of fish kills and with different amounts of information provided about health risks. We use a random-effects Tobit model to control for correlation across each observation and to account for censoring. We find that (i) pfiesteria-related fish kills have a significant negative effect on the demand for seafood even though the fish kills pose no known threat to consumers through sea-food consumption, (ii) seafood consumers are not responsive to expert risk information designed to reassure them that seafood is safe in the presence of a fish kill, and (iii) a mandatory seafood inspection program largely eliminates the welfare loss incurred due to misinformation.

Suggested Citation

  • Parsons, George R. & Morgan, Ash & Whitehead, John C. & Haab, Timothy C., 2006. "The Welfare Effects of Pfiesteria-Related Fish Kills: A Contingent Behavior Analysis of Seafood Consumers," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 35(2), pages 1-9, October.
    • Handle: RePEc:ags:arerjl:10205
    DOI: 10.22004/ag.econ.10205
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    1. Haab, Timothy C. & Whitehead, John C. & Parsons, George R. & Price, Jammie, 2010. "Effects of information about invasive species on risk perception and seafood demand by gender and race," Resource and Energy Economics, Elsevier, vol. 32(4), pages 586-599, November.
    2. O. Morgan & John Whitehead & William Huth & Greg Martin & Richard Sjolander, 2013. "A Split-Sample Revealed and Stated Preference Demand Model to Examine Homogenous Subgroup Consumer Behavior Responses to Information and Food Safety Technology Treatments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 54(4), pages 593-611, April.
    3. John C. Whitehead & O. Ashton Morgan & William L. Huth & Gregory S. Martin & Richard Sjolander, 2012. "Willingness-to-Pay for Oyster Consumption Mortality Risk Reductions," Working Papers 12-07, Department of Economics, Appalachian State University.
    4. 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.
    5. Zhou, Li & Turvey, Calum & Hu, Wuyang & Ying, Ruiyao, 2015. "Fear and Trust: How Risk Perceptions of Avian Influenza Affect the Demand for Chicken," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 202077, Agricultural and Applied Economics Association.
    6. Asche, Frank & Zhang, Dengjun, 2013. "Testing Structural Changes in the U.S. Whitefish Import Market: An Inverse Demand System Approach," Agricultural and Resource Economics Review, Cambridge University Press, vol. 42(3), pages 453-470, December.
    7. Zhou, Li & Turvey, Calum G. & Hu, Wuyang & Ying, Ruiyao, 2016. "Fear and trust: How risk perceptions of avian influenza affect Chinese consumers’ demand for chicken," China Economic Review, Elsevier, vol. 40(C), pages 91-104.
    8. William L. Huth & O. Ashton Morgan & John C. Whitehead, 2016. "Measuring the Impact of Improved Traceability Information in Seafood Markets Following a Large Scale Contamination Event," Working Papers 16-17, Department of Economics, Appalachian State University.
    9. Jardon Carlos & Molodchik A. Mariya, 2015. "Endowment of Intangible Resources and Phases of Internationalization in Emerging Economies. The Case of Russia," HSE Working papers WP BRP 22/IR/2015, National Research University Higher School of Economics.
    10. John C. Whitehead & O. Ashton Morgan & William L. Huth, 2018. "Convergent validity of stated preference methods to estimate willingness-to-pay for seafood traceability: The case of Gulf of Mexico oysters," Economics Bulletin, AccessEcon, vol. 38(1), pages 326-335.
    11. O. Ashton Morgan & John C. Whitehead & William L. Huth & Gregory S. Martin & Richard Sjolander, 2013. "Measuring the Impact of the BP Deepwater Horizon Oil Spill on Consumer Behavior: Evidence from a Natural Experiment," Working Papers 13-11, Department of Economics, Appalachian State University.
    12. 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.
    13. Hirotsugu Uchida & Cathy A. Roheim & Robert J. Johnston, 2017. "Balancing the Health Risks and Benefits of Seafood: How Does Available Guidance Affect Consumer Choices?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(4), pages 1056-1077.
    14. John C. Whitehead & O. Ashton Morgan & William L. Huth & Gregory S. Martin & Richard Sjolander, 2020. "Altruistic and Private Values For Saving Lives With an Oyster Consumption Safety Program," Risk Analysis, John Wiley & Sons, vol. 40(11), pages 2413-2426, November.

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