Understanding Food Scares: The Role of Ambiguity Aversion and Analogical Reasoning

ABSTRACT

Why do individuals exhibit similar reactions to manifestly different food scares? This article examines the hypothesis of analogical reasoning, a cognitive shortcut whereby individuals anchor their risk judgements in other similar previous risky events present in their memories explains together with known determinants of risks perceptions such as risk attitudes and ambiguity aversion. Considering the distribution of risk perceptions related to three food scares that people in Europe remember, namely dioxins, genetically modified food (GMF), and bovine spongiform encephalopathy (BSE). Furthermore, the article explores whether intrinsic individual attitudes toward risk (risk aversion) or a common human reaction to lack of information, namely ambiguity aversion, are associated with perceptions of risk. The findings suggest that perceptions of the three food scares appear to be statically distributed in almost the same way, consistently with the presence of analogical reasoning. Results show that although risk perceptions were affected by a degree of ambiguity aversion, the intensity of risk perceptions is mainly explained by individual-specific risk attitudes.

Key Words:

• analogical reasoning
• ambiguity aversion
• risk attitudes
• acceptance of genetically modified food

Notes

Understood as consequences on human health, the environment, or society.

Economists and psychologists differ in how they conceptualize risks. While the former emphasize the idea of “risk” as being the result of an outcome variability (Arrow 1971; Pratt 1964) and uphold subjective expected utility (Savage 1954) as a valid representation of human behavior, the latter conceive risk as the perception of a loss (Slovic and Lichtenstein 1968; von Winterfeldt and Edwards 1986).

Similarly, in exploring the development of food scares, some authors claim that scares result from conflicting information that leads to risk ambiguity (Sarin and Weber 1993; Camerer and Weber 1992).

GM food has sparked long-lasting debates in certain countries, and in recent years it has often been a central topic in the European media. It is, however, a conflictive issue in which the coverage of simple risks generates a certain anxiety in individuals as regards simple everyday decisions such as feeding.

Three questions were asked. First, whether individuals knew about “mad cow disease” (response: yes/no/DK). Second, do you know of any cases of mad cow disease?” (response: yes/no/DK). Finally, respondents were asked whether they knew about the dioxin crises.

The survey asked the following question: when you choose food, what do you take into account: (a) product appearance, (b) place of production, (c) labeling, and (d) process type.

Regarding the possibility of consuming an intoxicated product, such as “mayonnaise with salmonella,” how much more risky is it for you to eat meat that might contain CJD, GM food, irradiated products, or chicken that has possibly been fed with dioxins?

Ambiguity aversion is a dummy variable coded as 1 if individuals do select country A and 0 if country B is selected (Table 1).