Eileen O. van Ravenswaay

Measuring Consumer Demand for Ecolabeled Apples

gap. This article presents results of a study of consumer demand for ecolabeled apples. Because ecolabels are new, it examines consumer intentions to purchase an ecolabeled apple for the first time. It estimates how many consumers might try ecolabeled apples and examines how their decisions are affected by prices, the comprehensiveness of the environmental claims in the label, and the extent of proof given to support the claims. The role of concerns about the environment and food safety is also examined. Conceptual Framework

Sales Loss Determination in Food Contamination Incidents: An Application to Milk Bans in Hawaii

This article presents a procedure for estimating sales loss following a food contamination incident with application to the case of heptachlor contamination of fresh fluid milk in Oahu, Hawaii, in 1982. A major finding is that media coverage following the incident had a significant impact on milk purchases and that negative coverage had a larger effect than positive coverage. This conclusion implies that public statements by producers or government to assure the public of safe food supplies may be ineffective in restoring consumer confidence following the discovery of a food safety problem.

The Impact of Health Risk Information on Food Demand: A Case Study of Alar and Apples

One method used for overcoming the problem of preference revelation for safety improvements is to infer willingness-to-pay from consumer choice of private goods (Blomquist 1979, Dardis 1980, Hammitt 1986, Ippolito and Ippolito 1984). This strategy may be useful for estimating willingness-to-pay for food safety because in recent years information on risks from food additives has been widely reported by the news media and these reports have been found to affect food demand (Brown 1969, Brown and Folsom 1983, Johnson 1988, Shulstad and Stoevener 1978, Smith et al. 1988, Swartz and Strand 1981).

Using Ecolabeling to Encourage the Adoption of Innovative Environmental Technologies in Agriculture

The potential of ecolabeling to create economic incentives for the adoption of environmental technologies in agriculture is examined in this chapter. Ecolabeling programs were described. A theoretical framework was developed and used to derive the necessary economic conditions for ecolabeling programs to generate adoption incentives. The extent to which these conditions could be met in agriculture was investigated. The investigation used survey data on consumer demand and information on producer costs in reference to several new ecolabeling programs in agriculture. Since little empirical research has been completed on this subject, no definitive conclusions were made about the prospects of ecolabeling, but key research needs were identified.

Health Risk Information to Reduce Water Pollution

A growing body of empirical studies indicate that farmers are concerned about how agricultural practices may affect health risks and environmental quality. These studies suggest that farmers are not simply profit maximizers. Instead, they have multiple objectives that include health and environmental concerns. As a result, their privately optimal behavior can result in less use of polluting inputs than would result from straight profit maximization. A recent survey of Michigan corn growers found that many do care about herbicide risks, but that growers often lack adequate information about associated health and environmental risks. Results on willingness to pay (WTP) for reduced risk from herbicide leaching, carcinogenicity and fish toxicity suggest that better information could induce crop farmers to reduce nonpoint-source pollution.

Proposition 65 and the Economics of Food Safety

The ultimate question is, will the new incentives provided by Californias threat of warning requirements, risk information requirements, and penalties result in better food products, better information, and better satisfied consumers and at what cost At this point, it is too early to tell. Proposition 65 represents a major departure from established food safety laws. Where existing laws require limits on substances added to food, Proposition 65 potentially requires warnings if those limits still pose risks of cancer or reproductive harm. While existing food safety laws focus on substances added to foods, Proposition 65 potentially addresses exposures caused by naturally occurring toxins in foods. The act also extends the responsibility of private parties for developing risk information and enforcing food safety laws. The ultimate effect of Proposition 65 on food consumers and producers depends on how its provisions are implemented. At this time, uncertainty is great. This encourages potentially huge resource expenditures as the food industry and consumer groups seek to influence implementation and enforcement decisions.

The Political Economics of Risk/Benefit Assessment: The Case of Pesticides

Despite the fact that there has been much debate over whether a risk-benefit approach should be incorporated into the set of laws governing risks posed by agricultural and food-producing technologies (Kessler; Sporleder, Kramer, and Epp; Lave: Crouch and Wilson), there has been relatively little examination of how such an approach works in practice. Arguments for and against a riskbenefit approach are made on the basis of some hypothetical, and usually unspecified, definition of what the approach entails. Consequently, evaluations of risk-benefit approaches do not account for how agencies would implement them. It is important to consider this now because Congress appears to be increasingly inclined toward incorporating some sort of risk-benefit approach in statutory frameworks dealing with risks. When Congress has adopted risk-benefit approaches to regulating risks, it has typically chosen an implicit, informal balancing of risks and benefits (Field). The choice of what particular risks and benefits will be considered, and especially to what extent they will be evaluated, has often been left up to agencies. Economic theories of regulatory decision making (Stigler, Peltzman, Noll and Owen) provide a basis for making and testing predictions about how agencies would proceed when given broad and vague mandates. In particular, they would lead us to predict that there is selectivity in the way interests are represented and, thus, in the type of outcomes risk-benefit assessment produces. This paper examines the implications of these theories for agency implementation of an informal risk-benefit mandate. Hypotheses are developed and tested for the case of pesticide regulation by the Environmental Protection Agency (EPA).

Evaluating Programs That Save Lives: Discussion

accuracy of estimates of the benefits of public programs that reduce human health risks. This research also produces behavioral information that is more likely to be relevant to policy makers than benefit estimates alone. For example, the Evans and Viscusi paper discusses how the impact of health risk on utility varies with the severity of the health symptoms involved. They find the effect of minor injuries on utility is similar to a drop in income, whereas more serious health problems reduce the utility of income in the unhealthy state. Psychologists have often pointed out that the severity or dread associated with a health risk is important to peoples risk acceptance (Slovic). Evans and Viscusi offer an economic interpretation of how changes in the severity of a health risk could be expected to affect risk acceptance. The Evans and Viscusi paper also illustrates the importance to risk valuation of the baseline level of risk. Because the marginal utility of income declines with more severe risks, higher levels of initial risk will produce higher marginal valuations of risk reduction. This gives an economic explanation for the results reported in the Horowitz and Carson paper that peoples preferences for risk reduction are affected by the total number of deaths attributed to a particular hazard. It also provides a partial economic rationale for the commonly made argument that government should focus resources on reducing the largest risks, such as smoking and drunk driving, assuming, of course, that the costs of risk reduction are similar across different sources of hazard. Evans and Viscusi also point out that the direction of risk change matters. The state-dependent utility model predicts that people require

Organizational design and agribusiness management research

Many tasks one performed by markets are being carried out by large and complex business organizations. Consequently, the question of how to design effective organizations is an important research issue. This article explores existing research on the design of organizational structures for what it teaches about developing priorities for research on agribusiness management. It concludes that the theory of structural design implies that different designs may be required for agribusiness organizations which operate under different conditions than general business organizations. Specific research topics designed to examine whether and why this may be true are developed.