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Statistica Sinica 3(1993), 351-366


CONSUMER WILLINGNESS TO PAY

TO AVOID PESTICIDE RESIDUES


James K. Hammitt


RAND, 1700 Main Street


Abstract: The economic value consumers place on reductions in health risks is examined in the context of the choice between conventionally and organically grown fruits and vegetables, where the latter are cultivated without the use of synthetic pesticides. Price differences between organic and conventional versions of 27produce types are estimated using retail price data. These differences provide a lower bound on the incremental value that consumers who purchase organic produce assign to it. The risk avoided by substituting organic for conventional produce is evaluated to compare the cost-effectiveness of risk reduction across produce types and relative to risk-saving behavior in other contexts.



Key words and phrases: Health risk, willingness to pay, value of life.



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