Simultaneous‐Equation Model for Estimating Consumer Risk Perceptions, Attitudes, and Willingness‐to‐Pay for Residue‐Free Produce

The U.S. farm sector has used chemicals to control pests and diseases on crops for more than a century. The use of pesticidal chemicals has become an integral part of modern agriculture and undoubtedly is very important to many modern farming practices. Food crops account for about half of the more than one billion pounds of farm chemicals used in agricultural production annually (Hammitt 1986). Such widespread use of farm chemicals is not without risk and controversy. The very purpose of these chemicals often causes them to be toxic to mammals and to the environment. Evidence of environmental degradation and health risks associated with pesticide use have made food safety a priority issue on the public policy agenda. Penner, Kramer, and Frantz (1985) found that Kansas consumers ranked pesticide residues as the third most important food safety concern, following environmental contaminants and disease-causing organisms. Similarly, in a 1986 survey of Pennsylvania households 71.1 percent of respondents showed a great deal or some concern with eating fruits and vegetables sprayed or dusted with pesticides (Sachs, Blair, and Richter 1987). This compares to 41.5 percent of Pennsylvania respondents expressing concern in 1965 (Bealer and Willits 1968; Sachs, Blair, and Richter 1987). In a study of food shoppers among four U.S. cities, Zellner and Degner (1989) reported that about 83 percent of respondents expressed a high or medium level of concern about pesticides and chemicals. Other national polls conducted by Roper (1984), the Good Housekeeping Institute (1984), and the Food Marketing Institute (1989) also suggested that a large proportion of consumers (77 percent, 76 percent, and 82 percent, respectively) were concerned about pesticide residues in the food supply. Most recently, Zind (1990) reported that 86 percent of survey respondents expressed concern about chemical residues on fresh produce. Consumers appear to be increasingly concerned about chemicals in almost any form and about the safety of their food. Evidence consistently suggests a high level of perceived risks about pesticide residues among consumers. If perceptions are faulty, efforts at personal, public, and environmental protection are likely to be misdirected. Kramer (1990) warned that consumers' perceptions and concerns about pesticide and animal drug residues in foods can cause and translate into volatile and unpredictable market behavior. Consumers are apprehensive about the safety of their food because the risk associated with chemical residues is perceived as involuntary and its effect, involving the possibility of the most dread disease of cancer, delayed (Dardis 1988). People respond to the hazards they perceive. However, perceived risk is not always related to the probability of injury or illness calculated on an actuarial basis. Most toxicologists and food safety experts consider microbiological contaminants to be a far more serious hazard than chemical residues in the food supply (Stevens 1989). Studies have identified major food safety issues (Caswell 1990; Dardis 1988; Kramer 1990). Little empirical research has focused on analyzing the factors that explain consumers' concerns and the relationship between reported concerns and food purchase or consumption behavior. The objective of this study is to formulate a conceptual model for analysis of consumers' food safety concerns relative to the use of pesticides in fresh produce production. The study estimates the interrelationships among risk perceptions, attitudes about pesticide use, and willingness-to-pay within a systematic framework of decision making based on data collected from a survey of Georgia consumers. The conceptual model developed should provide important implications and applications for modeling a variety of other consumer choice-related behaviors. CONCEPTUAL FRAMEWORK The microeconomic model based on observed choice has traditionally been used to study consumer preferences and market behavior. …