Information, risk and trust in the food chain : Ex-ante valuation of consumer willingness to pay for beef quality information using the contingent valuation method

The safety of food has become an increasingly interesting issue to consumers and the media. It has also become a source of concern, as the amount of information on the risks related to food safety continues to expand. Today, risk and safety are permanent elements within the concept of food quality. Safety, in particular, is the attribute that consumers find very difficult to assess. The literature in this study consists of three main themes: traceability; consumer behaviour related to both quality and safety issues and perception of risk; and valuation methods. The empirical scope of the study was restricted to beef, because the beef labelling system enables reliable tracing of the origin of beef, as well as attributes related to safety, environmental friendliness and animal welfare. The purpose of this study was to examine what kind of information flows are required to ensure quality and safety in the food chain for beef, and who should produce that information. Studying the willingness to pay of consumers makes it possible to determine whether the consumers consider the quantity of information available on the safety and quality of beef sufficient. One of the main findings of this study was that the majority of Finnish consumers (73%) regard increased quality information as beneficial. These benefits were assessed using the contingent valuation method. The results showed that those who were willing to pay for increased information on the quality and safety of beef would accept an average price increase of 24% per kilogram. The results showed that certain risk factors impact consumer willingness to pay. If the respondents considered genetic modification of food or foodborne zoonotic diseases as harmful or extremely harmful risk factors in food, they were more likely to be willing to pay for quality information. The results produced by the models thus confirmed the premise that certain food-related risks affect willingness to pay for beef quality information. The results also showed that safety-related quality cues are significant to the consumers. In the first place, the consumers would like to receive information on the control of zoonotic diseases that are contagious to humans. Similarly, other process-control related information ranked high among the top responses. Information on any potential genetic modification was also considered important, even though genetic modification was not regarded as a high risk factor.

Valuation of reduced eutrophication in the Gulf of Finland : Choice experiment with attention to heterogeneous and discontinuous preferences and respondent uncertainty

Eutrophication of the Baltic Sea is a serious problem. This thesis estimates the benefit to Finns from reduced eutrophication in the Gulf of Finland, the most eutrophied part of the Baltic Sea, by applying the choice experiment method, which belongs to the family of stated preference methods. Because stated preference methods have been subject to criticism, e.g., due to their hypothetical survey context, this thesis contributes to the discussion by studying two anomalies that may lead to biased welfare estimates: respondent uncertainty and preference discontinuity. The former refers to the difficulty of stating one s preferences for an environmental good in a hypothetical context. The latter implies a departure from the continuity assumption of conventional consumer theory, which forms the basis for the method and the analysis. In the three essays of the thesis, discrete choice data are analyzed with the multinomial logit and mixed logit models. On average, Finns are willing to contribute to the water quality improvement. The probability for willingness increases with residential or recreational contact with the gulf, higher than average income, younger than average age, and the absence of dependent children in the household. On average, for Finns the relatively most important characteristic of water quality is water clarity followed by the desire for fewer occurrences of blue-green algae. For future nutrient reduction scenarios, the annual mean household willingness to pay estimates range from 271 to 448 and the aggregate welfare estimates for Finns range from 28 billion to 54 billion euros, depending on the model and the intensity of the reduction. Out of the respondents (N=726), 72.1% state in a follow-up question that they are either Certain or Quite certain about their answer when choosing the preferred alternative in the experiment. Based on the analysis of other follow-up questions and another sample (N=307), 10.4% of the respondents are identified as potentially having discontinuous preferences. In relation to both anomalies, the respondent- and questionnaire-specific variables are found among the underlying causes and a departure from standard analysis may improve the model fit and the efficiency of estimates, depending on the chosen modeling approach. The introduction of uncertainty about the future state of the Gulf increases the acceptance of the valuation scenario which may indicate an increased credibility of a proposed scenario. In conclusion, modeling preference heterogeneity is an essential part of the analysis of discrete choice data. The results regarding uncertainty in stating one s preferences and non-standard choice behavior are promising: accounting for these anomalies in the analysis may improve the precision of the estimates of benefit from reduced eutrophication in the Gulf of Finland.

Oligarchs, political regime changes, and firm valuation

This paper examines the impact of a regime shift on the valuation of politically powerful oligarch firms. Focusing on the Yeltsin-Putin regime shift in Russia, we find that the valuations of outside shareholders claims are significantly higher under the Putin regime than under the Yeltsin regime after controlling for industry and time effects. The findings suggest that the increasing cost of extracting private benefits outweigh the reduction in the value of political connections following the political regime change. The results are also consistent with changes in the risk of state expropriation. Our results show that effects driven by the political regime change complement the traditional view stating that increased ownership concentration improved the performance of Russian oligarch firms.