Safer food worth more to consumers: Harvard

December 15, 2011

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U.S. consumers are willing to pay more to help reduce risk of E.coli and salmonella outbreaks and other foodborne illness, according to Harvard University heath research, funded partly by the Economic Research Service of the U.S. Department of Agriculture and published in the journal Risk Analysis.

But how much more, and in which circumstances?

This picture is complex, says F3, not only because of nuances detailed in the study, but also because many Americans probably think they shouldn’t have to pay for extra protection when government already regulates the food industry. One analogy is how some shoppers feel they’re entitled to a discount if they use a self-checkout lane in a supermarket; they’re doing the work of the cashier and bagger, after all. These emotions are real, and they affect consumer behavior.

Which explains why it’s too early to tell if a food-safety funding campaign by VeriPrime, Inc., which claims to represent 65% of the nation’s fed cattle, will catch on. VeriPrime has a 45-day campaign underway asking meat packers and food retailers to unite in a national, coordinated effort to improve beef-product safety. VeriPrime wants stores to collect a penny per serving to help fund a system of interventions to remove pathogens and monitor the system’s effectiveness in real time; the specific interventions include beneficial probiotics and cattle immunization.

The Harvard study, Diminishing Willingness to Pay per Quality-Adjusted Life Year:  Valuing Acute Foodborne Illness (Kevin Haninger, James K. Hammitt, Risk Analysis, September 2011 issue) explored U.S. adults’ willingness to pay (WTP) to “reduce risk of acute foodborne illness of one to seven days’ duration and ranging from mild discomfort to symptoms requiring hospitalization.” The researchers found that estimated WTP increases with the severity and duration of the illness to be prevented, though not proportionately. WTP is more sensitive to illness severity than length, they concluded.

U.S. adults are willing to pay more to avoid mild illness, but not proportionately more to avoid a more serious illness, the researchers determined. They reason, therefore, that WTP “cannot be accurately estimated by multiplying the change in QALYs (Quality-Adjusted Life Years) by an appropriate monetary value….It may not be possible to estimate WTP as a function of health quality and duration separately,” the study said.

Americans are willing to pay a collective $4,500 to $6,500 to avoid each case of illness as a whole. If, for instance, 100 people are each willing to pay $1 to reduce their risk of 1 in 100, “they’re willing to pay $100 to save one person from getting sick,” co-author Haninger told Food Safety News.  “If willing to spend 45 cents to reduce risk by 1 in 10,000, you value that risk at $4,500.”

The study estimated some demographic differences, including:

•    Males value risk reduction 25% less than females.

•    Non-Hispanic blacks and Hispanics value risk reduction 2.4 and 2.0 times more, respectively, than non-Hispanic whites.

•    People with college degrees are willing to pay 23% less than the less educated, perhaps reflecting a better understanding of the small risk reduction.

•    People who prepare food at home value risk reduction less than others, perhaps because they perceive the risk as more controllable.

The survey’s 2,858 respondents estimated that, on average, 32% of the U.S. population contracts foodborne illness each year, a figure that is roughly compatible with an official estimate of 76 million cases per year.