Academic journal article The Journal of Consumer Affairs

Consumer Willingness to Pay for Seafood Safety Assurances

Academic journal article The Journal of Consumer Affairs

Consumer Willingness to Pay for Seafood Safety Assurances

Article excerpt

Over the past decade, consumers have become aware of the many benefits of seafood consumption. Concern for more healthy diets has led to increased levels of seafood consumption. In 1992, per capita consumption of seafood was 14.8 pounds, an 18.4 percent increase from 1980 (U.S. Department of Commerce 1993).(1) This has occurred despite the fact that the price index for seafood has risen faster than any other animal food commodity over the same period (Putnam and Allshouse 1992). The above data mask the fact that seafood consumption has declined to 14.8 pounds per capita from a record high in 1987 of 16.2 pounds per capita. In part, this may be due to increases in relative prices or decreased demand for luxury goods in a recessionary period. However, recent research has shown that seafood demand has also been negatively affected by a perceived health risk associated with consumption of seafood (Brooks 1992; Lin and Milon 1993). This decrease in seafood consumption has occurred despite increasing evidence that the actual risk from seafood is less than from other food sources (Bean and Griffen 1990; Young 1989).

Unnecessary concern over the risks of seafood consumption results in a loss to consumers. This loss stems from diminished utility due to decreased purchases of a product which the consumer might otherwise enjoy and diminished utility from increased uncertainty about health risks from current consumption, as well as the elimination of a good source of nutrients. Seafood is nutrient dense, containing high levels of protein, vitamins, and minerals per caloric volume. Additionally, its most important benefits are what seafood, in its natural state, does not contain - saturated fat, sodium, cholesterol, sugar, and potentially harmful additives. Consumers benefit from assurances of these positive aspects of seafood, but also that seafood does not cause harm.

Thus, it is in everyone's best interest that the federal government and seafood industry pursue a consumer education strategy to provide consumers with seafood safety assurances as well as information which allows them to assess seafood quality.(2) To evaluate the viability of such a strategy and its subsequent impact on seafood demand, the following questions must be answered: (1) are consumers able to distinguish among a variety of seafood safety assurances? (2) if so, what types of seafood safety assurances do consumers prefer? and (3) how much, if anything, are consumers willing to pay for these assurances? The objectives of the research presented in this paper are to describe and test a framework within which these questions may be addressed.

This paper presents the results of an experimental study conducted in Rhode Island, in a setting created to simulate seafood markets. The experiment was designed to elicit consumers' preferences for alternative types of seafood safety assurances. The first section of this paper provides background information on the issue of seafood safety, including current inspection policy and prospects for mandatory inspection, as well as the scientific view on the safety of seafood. Next, a description of the experimental study and the methodology is presented. The methodology is based on a contingent valuation technique in which the respondents are asked to state their willingness to pay for a particular product attribute, namely, seafood safety assurances. General qualitative results for this sample of Rhode Island consumers are presented, followed by the results of a limited dependent variable analysis of the sample's valuation of seafood safety assurance information. Finally, recommendations for directions for research in this important policy area are discussed.

CURRENT PERSPECTIVES

Media Coverage of the Seafood Safety Issue

While there are real risks associated with the consumption of selected seafood products, it is also true that perceived risk from seafood consumption has been enhanced by media stories. …

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