CONSUMERS' VALUATION OF INSECTICIDE USE RESTRICTIONS: AN APPLICATION TO APPLES

Abstract

Economic assessments of pesticide regulations typically focus on producer impacts and generally ignore possible changes in product demand. These changes may be nonnegligible if real and/or perceived product attributes change. We measure consumers' willingness to pay (WTP) for the elimination of one insecticide and also a whole group of insecticides in apple production using a multiple-round Vickrey auction. The data are analyzed using nonparametric statistical tests and a double-hurdle model. Our findings show that consumer perceptions of product attributes change if pesticides are removed from production, and this is reflected in WTP changes. WTP is shown to be income elastic.