Article

Re-examining economic options for import risk assessments

Risk and Sustainable Management Group, University of Queensland, Murray-Darling Program Working Papers 01/2007;
Source: RePEc

ABSTRACT Hypothetical bias is a persistent problem in stated preference studies. We propose and test a method for reducing hypothetical bias based on the cognitive dissonance literature in social psychology. A central element of this literature is that people prefer not to take inconsistent stands and will change their attitudes and behavior to make them consistent. We find that participants in a stated preference willingness-to-pay study, when told that a nonhypothetical study of similar goods would follow, state significantly lower willingness to pay than participants not so informed. In other words, participants adjust their stated willingness to pay to avoid cognitive dissonance from taking inconsistent stands on their willingness to pay for the good being offered. (09-WP 486)

0 Bookmarks
 · 
63 Views
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: Helicoverpa spp. (heliothis) are a major insect pest of cotton, grains and horticulture in the Murray‐ Darling Basin. Climate change is likely to make conditions more favourable for heliothis. This could cause regional comparative advantages in irrigation systems to change as management costs increase and yields decrease. Irrigation in the Murray Darling Basin produces 12 percent of Australia’s total gross value of agricultural production. If producers fail to consider climate change impacts on heliothis they may misallocate resources.Adamson et al. (2007 and 2009) have used a state contingent approach to risk and uncertainty to illustrate how producers could allocate irrigation resources based on climate change impacts on water resources. This is achieved by separating environmental risks and uncertainties into defined states of nature to which the decision makers have a set of defined responses. This approach assumes that the decision makers can achieve optimal allocation of resources as they have perfect knowledge in how they should respond to each state of nature (i.e. producers know how to manage heliothis now). Climate change brings a set of new conditions for which existing state parameters (mean and variance) will alter. Consequently a decision maker will have incomplete information about the state description; and the relationship between state allocable inputs and the associated state dependent output, until they have experienced all possible outcomes. Therefore if producers ignore climate changes to heliothis they may lock in resources that may prove to be unprofitable in the long run. The purpose of this paper is to suggest a framework that could be used for determining climate change impacts of heliothis (i.e. density), illustrate that management costs rise as density increases and how a stochastic function could deal with incomplete knowledge in a state contingent framework.
  • [Show abstract] [Hide abstract]
    ABSTRACT: Biosecurity is a concept that has important economic, social, ecological and health-related dimensions. By biosecurity we mean protection of production, ecosystems, health and the social infrastructure from external threats caused by pests, pathogens and diseases of various forms and origins. The fact that more goods, transport platforms and people are moving around the globe at increasing speeds provides unforeseen possibilities for rapid spread of different types of organisms. This is exacerbated by changes in the production structures and climate. As a result, both the benefits and the risks of changes in the food system cross borders more often, leading to an increased demand for biosecurity policies. Economics can be related to biosecurity in at least three fundamental ways. First, many of the ultimate or proximate causes of bioinvasions create economic welfare. Second, bioinvasions result in various types of impacts, many of which are economic by nature — or at least may be measured in economic terms. Third, the negative impacts of invasions or their probability of occurrence can often be either avoided or reduced. These biosecurity policies themselves have economic implications, which often may be quite different from those caused by the biological hazard itself. A few reviews of separate components of economics of biosecurity exist, but there have been no attempts to review the big picture. Instead, the previous reviews have concentrated on different components of biosecurity such as invasive species or animal diseases. Our aim is to look at the issue in broad terms, draw some commonalities from the research conducted, and identify areas in which economic analyses have primarily been conducted and in which areas there remains work to do. The review includes about 230 studies from all areas of biosecurity up to the year 2008. The review finds that study of economics of biosecurity is growing steadily, but is still relatively concentrated on narrow questions, few countries, few species/diseases and few journals.
    Agronomy for Sustainable Development 01/2011; · 3.57 Impact Factor
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: Hypothetical bias is a persistent problem in stated preference studies. We propose and test a method for reducing hypothetical bias based on the cognitive dissonance literature in social psychology. A central element of this literature is that people prefer not to take inconsistent stands and will change their attitudes and behavior to make them consistent. We find that participants in a stated preference willingness-to-pay study, when told that a nonhypothetical study of similar goods would follow, state significantly lower willingness to pay than participants not so informed. In other words, participants adjust their stated willingness to pay to avoid cognitive dissonance from taking inconsistent stands on their willingness to pay for the good being offered. (09-WP 486)
    Iowa State University, Department of Economics, Staff General Research Papers. 01/2009;

Full-text (2 Sources)

View
42 Downloads
Available from
Jun 1, 2014