Perceived Hazard and Product Choice: An Application to Recreational Site Choice

Document Type

Article

Journal/Book Title/Conference

Journal of Risk and Uncertainty

Volume

26

Issue

1

Publication Date

2003

First Page

77

Last Page

92

Abstract

We develop a "perceived hazard" model that estimates consumers' endogenous risk perceptions about products. These perceptions are then linked to a model of product choice. Our approach thus departs from the expected utility model that depends upon external risk assessments. In an application to recreational fishing, we find that anglers' perceived hazards associated with fish consumption advisories do affect product (recreational site) choice. Anglers' perceptions also affect welfare measures because the benefits of contaminant removal flow from these perceptions. The perceived hazard/product choice model is applicable to a wide variety of risky choices consumers face.

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