The economic value consumers place on reductions in health risks is examined in the context of the choice between conventionally and organically grown fruits and vegetables, where the latter are cultivated without the use of synthetic pesticides. Price differences between organic and conventional versions of 27 produce types are estimated using retail price data. These differences provide a lower bound on the incremental value than consumers who purchase organic produce assign to it. The risk avoided by substituting organic for conventional produce is evaluated to compare the cost-effectiveness of risk reduction across produce types and relative to risk-saving behavior in other contexts.
Originally published in: Statistica Sinica, v. 3, no. 2, July 1993, pp. 351-366.
This report is part of the RAND reprint series. The Reprint was a product of RAND from 1992 to 2011 that represented previously published journal articles, book chapters, and reports with the permission of the publisher. RAND reprints were formally reviewed in accordance with the publisher's editorial policy and compliant with RAND's rigorous quality assurance standards for quality and objectivity. For select current RAND journal articles, see External Publications.
This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.
RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.