Consumers are willing to pay more than government analyses suggest in order to reduce their risk of becoming ill from foodborne pathogens, according to a new study published in Food Policy
The researchers claim that basing cost-benefit analyses for potential ways to reduce the incidence of foodborne illness on how many illnesses and deaths such measures would prevent does not reflect actual benefit. They propose that the real value of any food safety procedure should be determined by how much consumers are willing to spend to avoid illness.
With this intention, Brian Roe, professor of agricultural, environmental and development economics at Ohio State University and Mario Teisl of the University of Maine, conducted surveys involving 3,511 individuals to find out how much more people were willing to pay for foods with a reduced risk of contamination with E. coli or listeria.
"We think what we are measuring is more realistic, as complete eradication is a highly unlikely outcome for any policy," Roe said. "We also are quite certain that our estimates of consumers' willingness to pay would be higher than what the USDA would calculate using its cost-of-illness approach."
The researchers found that Americans would be willing to pay around an extra dollar per year for a ten percent reduction in risk that they would get sick from eating a supermarket-bought hamburger that could be contaminated with E. coli. That is equal to about $305m for a ten percent risk reduction – compared to a 2008 US Department of Agriculture (USDA) analysis that estimated a $446m value for completely eradicating a specific type of E. coli contamination from all food sources.
"The [USDA] projections will estimate how many fewer people will die, how many fewer will get sick, and how do we assign benefit values to those improvements in the human condition," Roe said. "What we're saying is, let's think of a method where we can assign a value to that avoided case as well as one for a person who misses work and pays $20 to go to a doctor.
"To hedge their bets, would people be willing to pay $2 a year, $5 a year, to limit the odds they're going to get sick from 1 in 100 down to 1 in 1,000? That's the data you really want."
The researchers set up hypothetical scenarios about the purchase of either a package of hotdogs or a pound of hamburger. They set prices for the packages based on whether they were treated with ethylene gas processing or electron beam irradiation to reduce contaminants, or left untreated, and then described the probability that the food would be contaminated with either E. coli or listeria.
Respondents could choose to buy the food treated with the pathogen-reducing technology, buy their usual brand, or stop buying the product altogether. They found that consumers would spend more for the safer products, but only up to a certain amount.
Roe said that this cost-benefit assessment method measures the value to consumers of avoiding becoming ill, rather than just the cost of foodborne illness.
"If the food industry were forced to put technology in place that lowered the presence of E. coli and that ramped up prices to the extent where everybody had to pay about a dollar more out of pocket each year for hamburger, we're saying that, according to this model, that would be about an equal tradeoff for the US population. And if the technology costs only about 10 cents per person instead, that would seem like a good deal to most people," he said.
Source: Food Policy
Vol. 35 (2010) pp. 521–530
“Consumer willingness-to-pay to reduce the probability of retail foodborne pathogen contamination”
Authors: Mario F. Teisl, Brian E. Roe