method called “contingent valuation” to assess how much a consumer is willing to pay for implementation of measures that could decrease the risks posed by pesticide residues on food. A commonly used measure of potential consumer response is the impact of concerns on demand—in this case, the extent to which the presence of residues affects the unit price that consumers are willing to pay for any given quantity purchased. If the value of avoiding residues is large, consumers should be willing to pay a substantial premium for produce that is free of residues. A number of studies conducted in 1988–1990 attempted to estimate the consumers ' willingness to pay for produce certified to be free of pesticide (Gallup 1989, Ott 1990, Misra et al. 1991, Weaver et al. 1992). In those studies, respondents who reported being willing to pay much more for such produce were asked to choose which percentage markup represented the most extra that they would be willing to pay. This approach does not replicate an actual choice situation; that is, respondents knew their answer would have no direct financial consequences, such as actually paying more. Survey formats of this kind tend to generate excessively high reports of willingness to pay. Even so, few consumers reported being willing to pay more than 5% extra more for certified residue-free produce. Even fewer reported being willing to buy certified residue-free produce that had lower cosmetic quality or more surface defects. Misra et al. (1991) found that 56% of their respondents felt that fresh produce should be tested and certified as free of pesticide residue. When respondents were asked whether they were willing to pay extra for residue-free foods, 46% said “yes” and 26% said “no”. Of those who said “yes”, only 14% were willing to pay more than 10% extra, and only 1% were willing to pay more than 20% extra. In another study, which surveyed people visiting food stores that sold both organic and conventional produce, Jolly (1991) found that people who had purchased organic produce at least once in 3 months were willing to pay, on the average, an extra 37%, 40%, 61%, and 68%, respectively, for organic apples, broccoli, peaches, and carrots. The typical premiums on organic produce are higher than those percentages and in part explain the small market for such produce. Only 3.1% of consumers in the Jolly study who had purchased organic produce in the preceding 3 months were willing to buy organic apples when the premium was 147%.
Van Ravenswaay and Hoehn (1991b) used market data from the New York City area in assessing how much consumers would have been willing to pay to expedite removal of Alar from agricultural use. They estimated that New Yorkers would have been willing to pay an extra 30% for apples to avoid perceived risks associated with Alar in 1989. In nationwide household surveys by the same authors (van Ravenswaay and Hoehn 1991b, c), the general public was willing to pay 23.6 cents per