Health Risks in Food Products, Learning Opportunity and Values of Risk Information: An Application of Self-Protection Model

Health risks from food product consumption have received increased attention in recent years as a major consumer concern. Currently available empirical evi-dence suggests that consumers' concerns about food-related risks seem to moti-vate them to undertake some types of protective actions. Yet consumers seem to have difficulty dealing with low-probability events, but are able to learn about the risks after receiving new information. This paper proposes to develop a con-ceptual framework integrating these three separately treated components in dealing with food safety risks— risk perceptions, learning and averting behavior— into a single and consistent model of a two-period framework of expected utility maxi-mization. The ex ante value of risk information derived from the theoretical analysis reflects both changes in self-protection expenditures and values of im-proved decision making due to learning about health risks over time.