This study is an econometric systems approach to modeling the factors and linkages affecting risk perceptions toward agricultural biotechnology, self-protection actions, and food demand. This model is applied to milk in the United States, but it can be adapted to other products as well as other categories of risk perceptions. The contribution of this formulation is the ability to examine how explanatory factors influence risk perceptions and whether they translate into behavior and ultimately what impact this has on aggregate markets. Hadden's outrage factors on heightening risk perceptions are among the factors examined. In particular, the article examines the role of labeling as a means of permitting informed consent to mitigate outrage factors. The effects of attitudinal, economic, and demographic factors on risk perceptions are also explored, as well as the linkage between risk perceptions, consumer behavior, and food demand. Because risk perceptions and self-protection actions are categorical variables and demand is a continuous variable, the model is estimated as a two-stage mixed system with a covariance correction procedure suggested by Amemiya. The findings indicate that it is the availability of labeling, not the price difference, between that labeled milk and milk produced with recombinant bovine Somatotropin (rbST) that significantly affects consumer's selection of rbST-free milk. The results indicate that greater availability of labeled milk would not only significantly increase the proportion of consumers who purchased labeled milk, its availability would also reduce the perception of risk associated with rbST, whether consumers purchase it or not. In other words, availability of rbST-free milk translates into lower risk perceptions toward milk produced with rbST.

This study estimates the effect risk characteristics, described as outrage factors by Hadden, have on consumers' risk perceptions toward the food-related biotechnology, recombinant bovine growth hormone (rbGH). The outrage factors applicable to milk from rbGH treated herds are involuntary risk exposure, unfamiliarity with the product's production process, unnatural product characteristics, lack of trust in regulator's ability to protect consumers in the marketplace, and consumers' inability to distinguish milk from rbGH treated herds compared to milk from untreated herds. An empirical analysis of data from a national survey of household food shoppers reveals that outrage factors mediate risk perceptions. The results support the inclusion of outrage factors into the risk perception model for the rbGH product, as they add significantly to the explanatory power of the model and therefore reduce bias compared to a simpler model of attitudinal and demographic factors. The study indicates that outrage factors which have a significant impact on risk perceptions are the lack of trust in the FDA as a food-related information source, and perceiving no consumer benefits from farmers' use of rbGH. Communication strategies to reduce consumer risk perceptions therefore could utilize agencies perceived as more trustworthy and emphasize the benefits of rbGH use to consumers.

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This study examines the role of consumer beliefs and perceptions in explaining apprehension toward milk from recombinant bovine growth hormone (rbGH) treated cows. Results support thenotion that consumers overestimate risks associated with milk from rbGH treated herds. The study indicates the quantity of milk purchased, willingness to pay a premium for untreated milk, and gender positively influence risk perceptions, while income inversely influences risk perceptions.Since 1920, it has been known that the naturally occurring bovine growth hormone (bGH) increases milk production in dairy cows. However, not until 1973 with the advent of recombinant DNA technology was it possible to produce synthetic bovine growth hormone (rbGH) cost effectively and inject rbGH into lactating cows to increase milk production. Although the Food and Drug Administration has stated that rbGH is safe for human consumption (CAST 1993), the synthetic hormone has sparked controversy.Farmers, producers, policymakers, and consumers are debating whether, and if so what, differences exist between the synthetic bovine growth hormone (rbGH) and the natural bovine growth hormone (bGH). According to rbGH producers, their product offers increased milk production. However, their focus on the market's supply side did not adequately prepare rbGH's manufacturers for consumers' skepticism toward rbGH. Deep-rooted consumer beliefs that milk is a pure, wholesome product (Busch 1991) have created an obstacle to acceptance of rbGH use. This paper examines whether consumers overestimate risk from rbGH and what factors could contribute to that assessment. A theoretical model is proposed and survey data are used to estimate the factors contributing to overestimation of risk. Some studies (Fine, Deana Grobe is a graduate student, Oregon State University, Corvallis; and Robin Douthitt is Professor and Chair, Consumer Sciences, University of Wisconsin-Madison.

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