New WTP Estimates of the Demand for Food Safety
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Transcript of New WTP Estimates of the Demand for Food Safety
New WTP Estimates of the Demand for Food Safety
James K. Hammitt
Kevin Haninger
Harvard Center for Risk Analysis
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Motivation
Most cases of food-borne illness are non-fatal, short duration, caused by microbial pathogens
There are few estimates of WTP to reduce risk of comparatively minor morbidity
We conducted stated preference (contingent valuation) study of WTP to reduce risk of food-borne illness, focusing on acute episodes
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Survey Administration
Knowledge Networks internet panel• Representative of general population (on measurable
attributes)• 61% of invited panel members completed survey• 3% excluded (did not eat any of three foods or did not
answer WTP questions)Intervention: choose food produced by “superior
safety system” (safer, more expensive) or conventional
Double-bounded dichotomous-choice valuation questions
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Survey Instrument
Each respondent values two changes• Own risk
• Risk to child (2 – 18 yrs) in household (if applicable)
• Choice described as “food only [you / your child] will eat”
Risk of illness from microbial pathogens on food
Risk reduction and cost expressed per meal or per month (28% of respondents)
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Risk Attributes
Risk reduction: [4 or 2] to 1 per 10,000 per meal• Risk reduction = [3 or 1] per 10,000• Visual aid: white square w/ fraction colored red
Duration: 1, 3, 7 days
Severity: mild, moderate, severe
Mortality risk conditional on illness: 0, 1/10,000, 1/1,000
Food: chicken, ground beef, packaged deli meat
Initial bid: between $0.04 and $4.00 per meal• Follow-up bids half and twice as large
Per month: risk and bid calculated using respondent-reported consumption frequency
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Severity1. 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.
2. 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.
3. 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.
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Structure of Survey
Introduction• Experience with food-borne illness• Estimated prevalence
Practice valuation questions• Similar to elicitation• 1st practice: dominant choice, feedback to respondent, opportunity
to correct dominated choice• 2d practice: no dominance but feedback to respondent interpreting
choice (i.e., “safer but more expensive,” “less safe but less expensive”)
Valuation questionsFollow-up questions
• Scenario acceptance• Food-handling practices
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Type of chicken Your chance of illness per meal Cost per meal
Standard 4 in 10,000 Standard cost
Superior safety system 1 in 10,000 $0.50 more per meal than standard
The table below summarizes the differences between the Superior Safety System chicken and the standard chicken. Please consider which type of chicken you would buy for a meal that only you would eat. Remember that the extra money you spend for a meal with Superior Safety System chicken is money that you could no longer spend on other things you might want or need.
Whether you eat the Superior Safety System chicken or the standard chicken, if you get sick: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.You will have these symptoms for 3 days.There is a 1 in 10,000 chance that you will die from this sickness.If Superior Safety System chicken cost $0.50 more per meal than standard chicken, which type of chicken would you purchase?○ Standard○ Superior Safety System
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Sample Mean (std dev)Demographics Perception, behavior
Age 45 (16) Perceived prevalence 0.33 (0.23)
Child’s age 8.5 (4.9) Own risk higher 0.13
Male 0.48 Own risk lower 0.39
Black, non-Hispanic 0.11 Child’s risk higher 0.15
Hispanic 0.12 Child’s risk lower 0.34
Married 0.54 Prior illness 0.38
Household size 2.6 (1.4) Not confident in safety 0.16
Log HH income 10.4 (0.9) Distrust government 0.04
College degree 0.25 Distrust private sector 0.06
Consumption/month 5.7 (6.3) Prepare HH food (0-4) 2.36 (1.47)
Wash hands 0.62
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Household Comparison(means)
With child Without
Age 37 48
Married 0.68 0.48
Household size 3.6 2.2
College degree 0.21 0.27
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Estimating WTP
Double-bounded binary-choice response
Maximum-likelihood regression estimates assuming lognormal error
Separate models and subsamples• Reduce own risk, no child in household (N = 2467)
• Reduce own risk, child in household (N = 1160)
• Reduce risk to child (between 2 and 18)
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Regression Estimates
Adult w/o child
(N = 4934)
Adult w/ child
(N = 1160)
Child
(N = 1149)
Intercept 0.06 (0.11) 0.62 (0.25)*** 1.19 (0.25)***
Risk redn = 3 0.62 (0.08)*** 0.20 (0.16) 0.45 (0.17)***
Moderate 0.30 (0.10)*** 0.21 (0.20) 0.04 (0.21)
Severe 0.39 (0.10)*** 0.39 (0.20)*** 0.03 (0.20)
3 days 0.06 (0.10) -0.06 (0.20) 0.08 (0.20)
7 days 0.25 (0.10)*** -0.06 (0.20) -0.11 (0.20)
Mort 1e-4 0.12 (0.10) -0.05 (0.20) -0.09 (0.20)
Mort 1e-3 0.03 (0.10) 0.01 (0.20) -0.27 (0.20)
Per month 1.77 (0.09)*** 1.68 (0.18)*** 1.63 (0.18)***
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Sensitivity of WTP
More sensitive to probability change than to severity or duration of illness• Less than proportional to risk change (for adult
w/o child, WTP varies by 1.9, risk by 3)
Less sensitive to severity and duration for children than for adults
WTP per month proportional to frequency of consumption
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Demographics & Food Type
Adult w/o child Adult w/ child Child
Age 0.010 (0.003)*** 0.007 (0.008) 0.017 (0.019)**
Age of child -0.032 (0.018)*
Male -0.42 (0.08)*** -0.25 (0.18) -0.54 (0.19)***
Male child -0.01 (0.16)
Black, non-H 0.86 (0.14)*** 1.21 (0.29)*** 0.83 (0.29)***
Hispanic 0.62 (0.13)*** 0.72 (0.24)*** 0.55 (0.24)**
Log HH income 0.03 (0.05) 0.04 (0.10) -0.15 (0.10)
College degree -0.36 (0.09)*** -0.48 (0.21)** -0.46 (0.21)**
Ground beef -0.38 (0.09)*** -0.46 (0.19)** 0.26 (0.20)
Deli meat -0.32 (0.13)** -0.58 (0.29)** -0.35 (0.29)
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Risk Perception & Behavior
Adult w/o child Adult w/ child Child
Perceived prevalence 0.013 (0.002)*** 0.001 (0.004) 0.002 (0.004)
Perceive higher risk 0.39 (0.13)*** 0.65 (0.26)*** 0.34 (0.25)
Perceive lower risk -0.28 (0.09)*** -0.26 (0.17) -0.65 (0.18)***
Prior illness -0.21 (0.08)** 0.02 (0.16) -0.02 (0.17)
Not confident of safety -1.04 (0.12)*** -0.63 (0.24)*** -0.52 (0.24)**
Distrust government -0.71 (0.20)*** 0.12 (0.45) -0.18 (0.46)
Distrust private sector 0.49 (0.18)*** -0.07 (0.39) -0.21 (0.39)
Prepare HH food -0.10 (0.03)*** -0.01 (0.07) 0.02 (0.07)
Wash hands 0.42 (0.08)*** 0.53 (0.16)*** 0.08 (0.17)
Safe practices 0.22 (0.12)* 0.08 (0.26) -0.04 (0.27)
2d risk question 0.19 (0.08)*** 0.58 (0.16)*** -0.17 (0.16)
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Value per Statistical Case
Median WTP (lognormal error)
Sample-mean respondent
Specified illness
Mean of value per case for larger and smaller risk reductions
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Value per Statistical Case($1,000, std. err.)
Severity DurationAdult w/o children
Adult w/ children Child
Mild 1 8.3 (0.7) 10.8 (0.9) 24.9 (7.0)
Moderate 1 11.1 (0.9) 13.1 (1.1) 28.0 (7.7)
Severe 1 12.5 (1.0) 16.4 (1.3) 28.1 (7.6)
Mild 3 8.8 (0.7) 10.2 (0.9) 27.0 (7.4)
Moderate 3 11.7 (1.0) 12.3 (1.1) 30.4 (8.3)
Severe 3 13.2 (1.1) 15.4 (1.3) 30.5 (8.3)
Mild 7 10.8 (0.9) 10.4 (1.0) 23.6 (6.6)
Moderate 7 14.4 (1.1) 12.5 (1.3) 26.5 (7.5)
Severe 7 16.1 (1.2) 15.7 (1.5) 26.7 (7.3)
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Value per Statistical Life
WTP not significantly related to conditional mortality risk
Point estimates: $9 – 25 million • Study underpowered for estimating VSL
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WTP per QALY
Estimated value per case varies little with duration (1 – 7 days)• 28% more for 7 days than 1 day (adult w/o child)
Varies little with severity• 48% more for severe than mild case (adult w/ or w/o child)
Elicited health-related quality of life (HRQL) for current health and each severity• Loss in HRQL 1.9 to 2.3 times larger for severe than mild case
Value per case varies much less than proportionately to loss of HRQL
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HRQL by Severity(mean, std dev)
Health Utilitities
Index DecrementVisual
analog scale Decrement
Current health
0.80 (0.21) 0.76 (0.17)
Mild 0.51 (0.27) 0.29 0.58 (0.21) 0.18
Moderate 0.26 (0.31) 0.54 0.47 (0.23) 0.29
Severe 0.12 (0.31) 0.68 0.42 (0.25) 0.34
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Conclusion: WTP per case of acute food-borne illness
Varies with potential victim• $8,000 – 16,000 for adult respondent• $24,000 – 31,000 for his/her child
Varies with food type, respondent characteristics• Higher for chicken than ground beef, packaged deli meat• Higher for women, blacks and Hispanics, less educated• Increases with perceived risk and confidence in intervention
Largely insensitive to duration & severity• ≤ 30% larger for a week than a day• ≤ 50% larger for severe than mild• Less sensitive for risk to child than to adult
Estimated WTP is less than proportional to expected loss in QALYs