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Second-Order Ambiguity in Very Low Probability Risks: Food Safety Valuation

Author

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  • Kivi, Paul A.
  • Shogren, Jason F.

Abstract

Food consumption involves inherently risky decisions with uncertain probabilities. This study examines how second-order ambiguity, or uncertainty over probabilities, affects food safety decisions. We conduct a food safety survey wherein subjects face both unambiguous and ambiguous situations, each with the same expected value. Respondents show a preference for unambiguous situations and state a willingness to pay to avoid ambiguity

Suggested Citation

  • Kivi, Paul A. & Shogren, Jason F., 2010. "Second-Order Ambiguity in Very Low Probability Risks: Food Safety Valuation," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(3), pages 1-14, December.
    • Handle: RePEc:ags:jlaare:97857
    DOI: 10.22004/ag.econ.97857
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    Citations

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    Cited by:

    1. Peterson, Hikaru & Yamaura, Koichi, 2014. "Ambiguity Aversion and Preferences for Food Origin Post Fukushima Nuclear Disaster," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170552, Agricultural and Applied Economics Association.
    2. Yuqing Zheng & Chen Zhen & Daniel Dench & James M. Nonnemaker, 2017. "U.S. Demand for Tobacco Products in a System Framework," Health Economics, John Wiley & Sons, Ltd., vol. 26(8), pages 1067-1086, August.
    3. Toshio Fujimi & Masahide Watanabe & Ryuji Kakimoto & Hirokazu Tatano, 2016. "Perceived ambiguity about earthquake and house destruction risks," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 80(2), pages 1243-1256, January.
    4. Michael J. Weir & Thomas W. Sproul, 2019. "Identifying Drivers of Genetically Modified Seafood Demand: Evidence from a Choice Experiment," Sustainability, MDPI, vol. 11(14), pages 1-21, July.
    5. Toshio Fujimi & Masahide Watanabe & Ryuji Kakimoto & Hirokazu Tatano, 2016. "Perceived ambiguity about earthquake and house destruction risks," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 80(2), pages 1243-1256, January.
    6. Oh, Miyoung & Hennessy, David A., 2014. "Upstream and Downstream Strategic Food Safety Interactions," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 174105, Agricultural and Applied Economics Association.
    7. Chloe S McCallum & Simone Cerroni & Daniel Derbyshire & W George Hutchinson & Rodolfo M Nayga, 2022. "Consumers’ responses to food fraud risks: an economic experiment," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(4), pages 942-969.
    8. Oh, Miyoung, 2014. "Three essays on consumer choices on food," ISU General Staff Papers 201401010800005236, Iowa State University, Department of Economics.
    9. Watanabe Masahide & Kawata Yukichika, 2017. "What Extent of Welfare Loss is Caused by the Disparity between Perceived and Scientific Risks? A Case Study of Food Irradiation," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(1), pages 1-17, February.
    10. Cerroni, Simone & Notaro, Sandra & Shaw, W. Douglass, 2013. "How many bad apples are in a bunch? An experimental investigation of perceived pesticide residue risks," Food Policy, Elsevier, vol. 41(C), pages 112-123.
    11. Cerroni, Simone & Notaro, Sandra & Shaw, W. Douglass, 2012. "Eliciting and estimating valid subjective probabilities: An experimental investigation of the exchangeability method," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 201-215.

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    Keywords

    Risk and Uncertainty;

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