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Are Korean consumers willing to pay a tax for a mandatory BSE testing programme?

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  • Sang Hyeon Lee
  • Ji Yong Lee
  • Doo Bong Han
  • Rodolfo M. Nayga

Abstract

The outbreaks of mad cow disease (BSE) have significantly increased the demand for food safety programs in the Korean beef market. Two issues that are getting much attention are about whether Korea should implement mandatory testing of slaughtered domestic cattle for BSE and whether consumers are willing to pay a tax for the programme. No study, however, has examined consumers' willingness to pay (WTP) a tax for a BSE testing programme. We conducted a contingent valuation (CV) study using a double-bounded dichotomous choice approach to estimate Korean consumers' valuation for a mandatory BSE testing programme on slaughtered domestic cattle that are 21months or older. Our results show that the sample-population adjusted mean estimate of WTP a tax per year is 4482 KRW (US $4.01) per household. This suggests that Korean consumers have a strong preference for a mandatory testing of domestic cattle for BSE. This study also found that Korean consumers' WTP for the programme is greater than estimated implementation costs of the programme. These results imply that implementing a mandatory BSE testing programme in Korea could confer positive consumer welfare.

Suggested Citation

  • Sang Hyeon Lee & Ji Yong Lee & Doo Bong Han & Rodolfo M. Nayga, 2015. "Are Korean consumers willing to pay a tax for a mandatory BSE testing programme?," Applied Economics, Taylor & Francis Journals, vol. 47(13), pages 1286-1297, March.
    • Handle: RePEc:taf:applec:v:47:y:2015:i:13:p:1286-1297
    DOI: 10.1080/00036846.2014.993137
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    1. Jill J. McCluskey & Kristine M. Grimsrud & Hiromi Ouchi & Thomas I. Wahl, 2005. "Bovine spongiform encephalopathy in Japan: consumers' food safety perceptions and willingness to pay for tested beef," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(2), pages 197-209, June.
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    1. Willy Mulimbi & Lanier Nalley & Rodolfo M. Nayga & Arya Gaduh, 2023. "Are consumers willing to pay for conservation agriculture? The case of white maize in the Democratic Republic of the Congo," Natural Resources Forum, Blackwell Publishing, vol. 47(1), pages 22-41, February.
    2. Young Woon Choi & Ji Yong Lee & Doo Bong Han & Rodolfo M. Nayga, 2018. "Consumers’ Valuation of Rice‐Grade Labeling," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(3), pages 511-531, September.
    3. Knapp, T. & Kovacs, K. & Huang, Q. & Henry, C. & Nayga, R. & Popp, J. & Dixon, B., 2018. "Willingness to pay for irrigation water when groundwater is scarce," Agricultural Water Management, Elsevier, vol. 195(C), pages 133-141.

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