Valuing ambiguity: the case of genetically engineered growth enhancers

A split-valuation method is developed and implemented to elicit the willingness to pay to consume—or avoid consuming—a product of ambiguous quality. The split-valuation method uses experimental auction markets to separate and value the positive and negative attributes of the ambiguous good. The resu...

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Bibliographic Details
Published in:Journal of agricultural and resource economics 1993-12, Vol.18 (2), p.175-184
Main Authors: Buhr, B.L, Hayes, D.J, Shogren, J.F, Kliebenstein, J.B
Format: Article
Language:English
Subjects:
ambiguity
AUCTIONS
Biotechnology
CARNE DE CERDO
COMPORTAMIENTO DEL CONSUMIDOR
COMPORTEMENT DU CONSOMMATEUR
CONCEPTION
CONSUMER BEHAVIOUR
Consumer economics
DESARROLLO DE UN PRODUCTO
DESIGN
DEVELOPPEMENT DE PRODUIT
DISENO
ECONOMIC THEORIES
Economic value
Experiment design
EXPERIMENTACION
experimental economics
EXPERIMENTATION
Farm economics
GENETIC ENGINEERING
GENIE GENETIQUE
growth hormones
INCENTIVES
INCENTIVOS
INCITATION
INGENIERIA GENETICA
Meat packing industry
Meats
NEW PRODUCTS
PIGMEAT
PORK
PRODUCT DEVELOPMENT
Sandwiches
SOMATOTROPIN
SOMATOTROPINA
SOMATOTROPINE
split-valuation method
SUBASTAS
TEORIAS ECONOMICAS
THEORIE ECONOMIQUE
valuation
VALUE THEORY
VENTE AUX ENCHERES
VIANDE PORCINE
vickrey auction
willingness-to-pay
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Description
Summary:A split-valuation method is developed and implemented to elicit the willingness to pay to consume—or avoid consuming—a product of ambiguous quality. The split-valuation method uses experimental auction markets to separate and value the positive and negative attributes of the ambiguous good. The results show that the method can be used to successfully value a good of ambiguous quality. Our application reveals that for a sample of students at a midwestern land-grant institution, the average respondent is willing to pay a premium for meat produced with the use of a genetically engineered growth enhancer that has 30% to 60% fewer calories and is 10% to 20% leaner.
ISSN:1068-5502
2327-8285
DOI:10.22004/ag.econ.30963