Three essays on the effect of information on product valuation
Benefits and consequences of controversial products are debated in the public arena for the protection of consumers and to evaluate the market decisions made by industry and government. The food industry continues to develop new foods as well as processes to bring food to the market. Some of these processes bring to issue the safety of the products or the impact on the market, workers, or environment. Such controversial products or processes include BSE (mad cow disease), genetically modified organisms (GMO), antibiotics, pesticides, carbon monoxide modified atmosphere packaging, and food irradiation. This thesis sets out with the objective of understanding, developing, and utilizing methodologies similar to those used in other contingent valuation studies to evaluate how consumers are influenced by varying information using food irradiation as a focus subject. Food irradiation is a technological food process that continues to be debated and much information favoring and opposing it is readily available to the public, making it a suitable subject about which to study information effects and consumer acceptance. To accomplish this objective, consumers were surveyed in grocery stores in the state of Texas during the spring of 2006. As irradiated foods are not currently widely available, a hypothetical product, irradiated mangoes, was used to elicit information from survey participants. The survey was comprised of two parts. First general information regarding consumer knowledge and trust of food irradiation as well as willingness to pay (WTP) was collected. Second, varying information regarding food irradiation (positive, negative, or mixed) was presented and questioning was reaccomplished. Evaluation of the survey data was made in three papers, each comprising its own chapter in this thesis. The first paper evaluates consumers? initial trust and knowledge of food irradiation and how these factors interact with information in changing WTP. The second paper assesses responses for a ?cheap talk? effect. Cheap talk is informing consumers of the existence of hypothetical bias in studies of this type with the goal being to reduce this bias to real life response equivalence. The third paper evaluates not only WTP, but also how consumer trust is affected by varying forms of information.