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Economic Costs of Misinforming About Risk: The EDB Scare and the Media

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  • F. Reed Johnson

Abstract

This study reports results of an analysis of consumer responses to news reports of grain‐product contamination by the pesticide ethylene dibromide (EDB). The results demonstrate that it is possible to quantify market disruption related to the dissemination of risk information. Implications include the need for increased awareness among risk managers that public perceptions, regardless of their objective accuracy, can induce real economic costs. Such costs should be considered in designing regulatory and information policies.

Suggested Citation

  • F. Reed Johnson, 1988. "Economic Costs of Misinforming About Risk: The EDB Scare and the Media," Risk Analysis, John Wiley & Sons, vol. 8(2), pages 261-269, June.
    • Handle: RePEc:wly:riskan:v:8:y:1988:i:2:p:261-269
    DOI: 10.1111/j.1539-6924.1988.tb01179.x
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    References listed on IDEAS

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    1. Ippolito, Pauline M, 1981. "Information and the Life Cycle Consumption of Hazardous Goods," Economic Inquiry, Western Economic Association International, vol. 19(4), pages 529-558, October.
    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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    Cited by:

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    2. Hoehn, John P., 1989. "Consumer Demand for Innovation in Food Safety," Staff Paper Series 201028, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    3. Aye Chan Myae & Ellen Goddard, 2020. "Household behavior with respect to meat consumption in the presence of BSE and CWD," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 68(3), pages 315-341, September.

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