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The Welfare Effects of Pfiesteria-Related Fish Kills: A Contingent Behavior Analysis of Seafood Consumers

Published online by Cambridge University Press:  15 September 2016

George R. Parsons ,
Ash Morgan ,
John C. Whitehead  and
Timothy C. Haab
George R. Parsons
Affiliation:
College of Marine Studies and Department of Economics at the University of Delaware in Newark, Delaware
Ash Morgan
Affiliation:
Department of Marketing and Economics at the University of West Florida in Pensacola, Florida
John C. Whitehead
Affiliation:
Department of Economics at Appalachian State University in Boone, North Carolina
Timothy C. Haab
Affiliation:
Department of Agricultural, Environmental, and Development Economics at Ohio State University in Columbus, Ohio
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Abstract

We use contingent behavior analysis to study the effects of pfiesteria-related fish kills on the demand for seafood in the Mid-Atlantic region. We estimate a set of demand difference models based on individual responses to questions about seafood consumption in the presence of fish kills and with different amounts of information provided about health risks. We use a random-effects Tobit model to control for correlation across each observation and to account for censoring. We find that (i) pfiesteria-related fish kills have a significant negative effect on the demand for seafood even though the fish kills pose no known threat to consumers through seafood consumption, (ii) seafood consumers are not responsive to expert risk information designed to reassure them that seafood is safe in the presence of a fish kill, and (iii) a mandatory seafood inspection program largely eliminates the welfare loss incurred due to misinformation.

Keywords

pfiesteriaseafood demandnon-market valuation
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 35 , Issue 2 , October 2006 , pp. 348 - 356
Copyright
Copyright © 2006 Northeastern Agricultural and Resource Economics Association 

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