Hammitt, James K. and Rheinberger, Christoph M. (2013) The Welfare Value of FDA’s Mercury-in-Fish Advisory: A Dynamic Reanalysis. LERNA Working Paper, n. 13.07.394

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Abstract

Assessing the welfare impact of consumer health advisories is a thorny task. Recently,
Shimshack and Ward (2010) studied how U.S. households responded to FDA’s 2001
mercury-in-fish advisory. They found that the average at-risk household reduced fish
consumption by about 24%, resulting in a 21%-reduction in mercury exposure at the
cost of a 28%-reduction in cardioprotective omega-3 fatty acids. A rough assessment of
the health costs and benefits led Shimshack and Ward to conclude that the advisory
policy resulted in an overall consumer welfare loss. In this note, we propose a more
comprehensive assessment that links the long term cardiovascular health effects of the
advisory policy to life cycle consumption. In addition to mortality risk, our model
values the loss in health quality from non-fatal cardiovascular diseases. Using the same
dose-response relationships as Shimshack and Ward, we find that the expected health
and mortality loss to the average at-risk household is much larger than they suggested.
The analysis highlights the importance of accounting for dynamic effects when
evaluating persistent changes in exposure to environmental health risks.