Willingness to pay for food safety: sensitivity to duration and severity of illness.

Models 2, 4, and 6 supplement the basic specification with variables that describe respondent characteristics. Coefficients of the risk-characteristic variables are not substantially altered. All three models suggest that estimated WTP is larger for respondents who are female, Black, Hispanic, or have no college degree. The estimated effects of income and marital status are insignificant and there is modest evidence that WTP increases with respondent age and decreases with age of the child to be protected. Respondents' perceptions of risk and confidence in protection mechanisms show significant effects: Estimated WTP is generally larger when own or child's risk is perceived to be larger than average and smaller when risk is perceived to be smaller than average (though only four of six relevant coefficients are significant). Estimated WTP is smaller for respondents who are not confident that the hypothetical safety system would be effective. Among respondents in households without children, estimated WTP is larger when trust in the private sector is low and smaller when trust in government is low; in other words, WTP increases with the perceived need for and efficacy of a government program. Estimated WTP to reduce own risk appears larger for respondents who wash their hands or practice other safe food-handling practices (perhaps reflecting greater concern for food safety) and smaller for those with primary responsibility for preparing meals in their households (four of six relevant coefficients are significant). There is evidence of an order effect, with WTP estimated from the second valuation question significantly larger than that from the first, except when the second question is about risk to a child. Finally, estimated WTP to reduce own risk, but not a child's risk, is significantly larger for chicken than for ground beef and packaged deli meat.

Value per Statistical Case of Food-Borne Illness

Estimated WTP per statistical case avoided is reported in table 2. It is calculated by predicting median WTP for the full-sample-mean respondent for each severity-duration combination and dividing by the risk reduction. (4) For households without children, WTP to reduce own risk varies between $8,300 and $16,100 per case, increasing with both severity and duration (with standard errors of $700 to $1,200).

For households with children, WTP to reduce own risk is of similar magnitude but less sensitive to risk characteristics. The values per statistical case are larger for one- and three-day episodes and smaller for seven-day episodes than for respondents in households without children. The range of values is correspondingly smaller, between $10,800 and $16,400 per case (with standard errors of $900 to $1,500).

WTP to reduce risk to a child is much greater than to reduce own risk but insensitive to severity and duration of illness. The value per statistical case ranges between $23,600 and $30,500 (with standard errors of $6,600 to $8,300, which are much larger than for adults). The estimated value per seven-day case is implausibly smaller than for shorter episodes because the estimated coefficient on seven-day duration is less than (though not significantly different from) zero. Controlling for severity and duration, the value per statistical case for a child is between 1.7 and 2.6 times as large as for an adult for households with children.

Conclusion

Our stated-preference estimates suggest that WTP to reduce risk of short-term morbidity from food-borne pathogens is on the order of $10,000 per statistical case avoided for adults and twice as large for children. Estimated WTP is surprisingly insensitive to severity and duration of illness, especially for children. This insensitivity is unlikely to reflect respondents' unfamiliarity with these attributes or inattention to details of the scenarios given the significant association of WTP with stated risk reduction, a much more difficult attribute to grasp.

New Estimates of the Demand for Food Safety (Tanya Roberts, USDA, Organizer)

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(1) Mild: "You will have an upset stomach and will feel tired, but these symptoms will not prevent you from going to work or from doing most of your regular activities." Moderate: "You will have an upset stomach, fever, and will need to lie down most of the time. You will be tired and will not feel like eating or drinking much. Occasionally, you will have painful cramps in your stomach.

In addition, you will have some diarrhea and will need to stay close to a bathroom. While you are sick, you will not be able to go to work or do most of your regular activities." Severe: "You will have to be admitted to a hospital. You will have painful cramps in your stomach, fever, and will need to spend most of your time lying in bed. You will need to vomit and will have severe diarrhea that will leave you seriously dehydrated. Because you will be unable to eat or drink much, you will need to have intravenous tubes put in your arm to provide nourishment."

(2) I.e., exp(0.297) - 1 = 35%; exp(0.387) 1 = 47%.

(3) Estimates derived by adjusting values per case reported in table 2 for mortality risk. For example, estimated value per mild one day case is $8.300 with no mortality risk and exp(0.121) larger (i.e., $9,400) with conditional mortality risk of [10.sup.-4]. Implied VSL = ($9,400-$8,400)/([10.sup.-4]) = $10 million.\

(4) The estimated value per statistical case is calculated for each of the two probability reductions and then averaged.

James K. Hammitt is Professor and Kevin Haninger is Research Associate at the Center for Risk Analysis, Harvard University.

This work was supported by the Economic Research Service of the United States Department of Agriculture. We thank Nicole Ballenger, Steve Crutchfield, Joni Hersch, Fred Kuchler. Amanda Lee, Katherine Ralston, Tanya Roberts, Milton Weinstein, and Kip Viscusi for helpful discussions.

This article was presented in a principal paper session at the AAEA annual meeting (Portland, OR, July 2007). The articles in these sessions are not subjected to the journal's standard refereeing process. Table 1. Descriptive Statistics and Regression Estimates Variable Mean

(Std. Dev.)

Full Sample

(N = 3,766) Intercept Risk reduction = 3 x

[10.sup.-4] Moderate symptoms Severe symptoms 3 days illness 7 days illness Conditional mortality

risk = [10.sup.-4] Conditional mortality

risk = [10.sup.-3] Monthly version 0.283

(0.450) Age (years) 44.738

(16.306) Child age (years) 8.462

(4.885) Male 0.475

(0.499) Male child 0.530

(0.499) Black, non-Hispanic 0.110

(0.313) Hispanic 0.121

(0.326) Other race, non-Hispanic 0.038

(0.191) Married 0.542

(0.498) Household size (number) 2.596

(1.357) Log household income 10.442

(0.944) College degree 0.247

(0.431) Perceived prevalence 32.717

(percent) (23.227) Perceive own risk 0.134

to be higher (0.340) Perceive own risk 0.389

to be lower (0.488) Perceive child's risk 0.155

to be higher (0.362) Perceive child's risk 0.344