The Validity of Subjective Risk Estimates Elicited Via the Exchangeability Method: An Experimental Investigation on the Presence of Pesticide Residues in Apples
12:00 - 13:30
Using a laboratory experiment, we elicit consumers’ risk perceptions of the probability that given levels of pesticide residues will be present in apples via an innovative risk elicitation technique known as the Exchangeability Method (EM). We also investigate the validity of stated risks by defining a valuation method based on de Finetti’s notion of “coherence”, under which probability estimates are valid if and only if they obey all axioms of probability theory. Our results suggest that consumers do not broadly concern about the presence of pesticide residues in apples, but they particularly worry about the introduction of new active principles and the presence of multiple residues. Moreover, we find that the magnitude of valid risk estimates slightly diverges from that of not valid risk estimates. Finally, by using an econometric approach, we identify the attitudinal and socio-economic factors which shape consumers’ perceptions of pesticide residues in apples.