The Case of Fukushima Nuclear Power Plant Accident in Japan

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No-tolerant Consumers, Information Treatments, and Demand for Stigmatized Foods: the Case of Fukushima Nuclear Power Plant Accident in Japan

S. Shimokawa¹; Y. Niiyama²; Y. Kito³; H. Kudo⁴; M. Yamaguchi⁵

1: Waseda University, , Japan, 2: Ritsumeikan University, , Japan, 3: Doshisha University, , Japan, 4: Osaka Shoin University, , Japan, 5: Ryukoku University, , Japan Corresponding author email: [email protected] Abstract: Six years on from the Fukushima nuclear power plant accident in Japan, some consumers still avoid purchasing foods from Fukushima prefecture even when their safety is scientifically guaranteed. Exploiting this situation, we demonstrate how the willingness-to-pay (WTP) approach can be misleading to analyze the demand for food that is stigmatized by some consumers. Conducting choice experiments for rice in Japan in 2016, we explicitly separate the consumers who excessively avoid Fukushima foods (no-tolerant consumers) from other ordinary consumers. We then investigate whether the WTP for Fukushima rice and the safety standard label are systematically different between the two types of consumers. We also examine how providing additional scientific information influences the WTP differently between the two types. We found that 33% of our sample were no-tolerant consumers, and their WTP for Fukushima rice was substantially lower than the market price while ordinary consumers’ WTP was higher than the market price. Without distinguishing the two types, the average WTP became lower than the market price even with the safety standard label, which misleadingly understated the value of Fukushima rice and the label. Lastly, we found little effect of providing additional scientific information on the WTP in both types. Acknowledegment: JEL Codes: Q18, Q51

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No-tolerant Consumers, Information Treatments, and Demand for Stigmatized Foods: the Case of Fukushima Nuclear Power Plant Accident in Japan

Abstract Six years on from the Fukushima nuclear power plant accident in Japan, some consumers still avoid purchasing foods from Fukushima prefecture even when their safety is scientifically guaranteed. Exploiting this situation, we demonstrate how the willingness-to-pay (WTP) approach can be misleading to analyze the demand for food that is stigmatized by some consumers. Conducting choice experiments for rice in Japan in 2016, we explicitly separate the consumers who excessively avoid Fukushima foods (no-tolerant consumers) from other ordinary consumers. We then investigate whether the WTP for Fukushima rice and the safety standard label are systematically different between the two types of consumers. We also examine how providing additional scientific information influences the WTP differently between the two types. We found that 33% of our sample were no-tolerant consumers, and their WTP for Fukushima rice was substantially lower than the market price while ordinary consumers’ WTP was higher than the market price. Without distinguishing the two types, the average WTP became lower than the market price even with the safety standard label, which misleadingly understated the value of Fukushima rice and the label. Lastly, we found little effect of providing additional scientific information on the WTP in both types.

Keywords: choice experiments, information, no tolerance, radiation exposure, willingness to pay JEL codes: Q13, Q18, Q51

1. Introduction

The Willingness-To-Pay (WTP) approach is designed based on the conventional

Economics framework that views people’s response to risk as continuous and proportional. However, as psychologists claim, people’s response to risk is sometimes dichotomous, non-proportional, and fear based. Moreover, excessive fear-based response can result in stigmatizing a product which is hard to eliminate over a long time period

(Schulze and Wansink, 2012). Despite this possibility, the WTP approach is often used to analyze food demand even when the food has a potential risk that some consumers respond in a dichotomous or fear-based way (e.g., Ito and Kuriyama, 2016). Thus, this paper demonstrates how the WTP approach can be misleading to analyze the demand for food that is stigmatized by some consumers due to their excessive fear-based responses.

We focus on the case of the Fukushima nuclear power plant accident in Japan, which provides one of rare opportunities to observe people’s excessive fear-based responses. Shortly after the accident on March 11 in 2011, radioactivity was detected and agricultural products were contaminated in the coastal areas of Fukushima and neighboring prefectures such as Ibaraki prefecture (See Figure 1). To manage the food risks due to the accident, the Ministry of Health, Labour and Welfare (hereafter MHLW) noticed the local governments of the affected areas to regulate the distribution of foods that exceeded the levels of “provisional regulation values” for radiation exposure via food consumption defined in the “Indices relating to limits on food and drink ingestion” on March 17. Since then, Japanese consumers have been sensitive to the risk of radiation exposure via food consumption (Niiyama et al. 2013). Six years on from the accident, some consumers still avoid purchasing foods from Fukushima prefecture even when the foods are from the unaffected areas in the prefecture and their safety is

2 scientifically inspected and guaranteed.

We apply the WTP approach and investigate consumer preference for product origin and safety inspection result of rice by using data from choice experiments conducted among grocery shoppers in nine prefectures from two major consumption areas in Japan (Kanto and Kinki areas) in March in 2016. In the experiment, we selected five product origins that range from the prefecture that was most damaged by the accident (Fukushima) to the one with no damage from the accident (Hokkaido). Before the choice experiment, we also provided different combinations of information about radiation exposure, half-life, and DNA recovery (information treatments) to investigate the impact of additional scientific information on the WTP. After the choice experiment, we further asked about consumers’ attitude toward Fukushima rice in detail and their background information. We employed mixed logit models (also called random parameter logit models) to estimate the WTP for each attribute of rice.

The contribution of this paper is twofold. First, we explicitly separate consumers into two types: no-tolerant consumers who avoid purchasing Fukushima rice regardless of price and safety inspection result, and other ordinary consumers who are responsive to price regardless of product origins. We expect that no-tolerant consumers’ responses to Fukushima rice are excessively fear-based, while ordinary consumers’ responses are continuous and proportional. Thus, the WTPs for Fukushima rice and the safety inspection results may be systematically different between no-tolerant consumers and ordinary consumers. Moreover, without distinguishing the consumer types, the

WTP approach may provide misleading implication for the demand for Fukushima rice.

These possibilities have been hardly examined partly because such cases are relatively rare and partly because the possibilities are overlooked or understated.

Second, we investigate how the impact of providing additional information on the WTP can be different between no-tolerant consumers and ordinary consumers.

Previous studies show that exposure to food risk information may change consumers’ risk perceptions and thus may influence the demand for the food (Piggott and Marsh, 2004;

Johnson and Myatt, 2006; Rickard et al., 2011; Ito and Kuriyama, 2016). We expect that the influences on consumers’ risk perceptions may be systematically different between no-tolerant consumers and ordinary consumers, and thus the influences on the WTP may also be different. Clarifying the different impacts of providing additional information would be particularly useful to design more effective risk communications.

There are four key findings. First, we found that 33% of our sample showed no tolerance to Fukushima rice, and their WTP for rice from Fukushima and neighboring prefectures (Aizu and Chiba) were less than a half of ordinary consumers’ WTP and were substantially lower than the actual market price (i.e., they never buy Fukushima rice). In contrast, no-tolerant consumers’ WTP for rice from the prefectures far from the accident cite (Hokkaido and Niigata) were similar to ordinary consumers’. Second, ordinary consumers’ WTP for Fukushima rice with a “under the safety standard” label was higher than the actual market price (i.e., they may buy Fukushima rice). But, their

WTP for Fukushima rice did not exceed the market price without the positive WTP for the safety standard label, which may imply the importance of labeling the safety inspection result. Third, without distinguishing the consumer types, the average WTP for Fukushima rice became lower than the market price even with the safety standard label. This may imply that the WTP approach can misleadingly understate the market value of Fukushima rice and safety inspection result. Lastly, we found little beneficial effect of providing additional information about radiation exposure, half-life and DNA

4 recovery on the WTP for Fukushima rice.

The rest of the paper is organized as follows. Section 2 describes our experimental design. Section 3 illustrates study sample and data. Section 4 explains estimation strategies. Section 5 presents the estimation results. Second 6 concludes with a discussion of .

2. Experimental Design

We start our survey by asking a screening question (whether you usually go grocery shopping for your household) and three warming-up questions about their grocery shopping patterns (shopping frequency, a type of the most commonly-used shopping site, and a distance to the site). We then proceed information treatment, choice experiment, and post-experiment questions. Following subsections explain each step in more detail.

Information Treatment

Before our choice experiment, we conducted information treatments. We have a control group, three treatment groups, and a placebo group. The control group receive no information before our choice experiment. Other four groups are asked to read a one-page information before the experiment. Regardless of the contents, all groups read about 500 characters and one figure. All the treatment groups read information about daily radiation exposure (DRE). Treatment 1 includes information only about DRE, treatment 2 includes information about DRE and a half-life of radioactive materials, and treatment 3 includes information about DRE and DNA recovery. In other words, the contents are more complex for treatments 2 and 3 compared to treatment 1. In contrast, the placebo group reads information about global warming which is non-positive and irrelevant to nuclear

5 accident.

Choice Experiment

Our choice experiment focuses on rice in Japan because rice is the most widely consumed and produced food product in Japan and thus has a wide variety of product origins (i.e., the distance from the accident cite). Table 1 summarizes the attributes of the product profiles in the experiment. The attributes include product origin (five prefectures/cities in

Japan: Fukushima, Aizu, Chiba, Hokkaido, Niigata), radioactive inspection result (three levels: no inspection, under the safe standard, under a half of the safe standard), and product price1 (five levels for each product origin).

The product origins were selected by two criteria: the distance from the

Fukushima accident cite and the nation-wide availability. In terms of the distance, the farthest prefecture from the accident cite is Hokkaido followed by Niigata, Chiba, Aizu, and Fukushima. Fukushima and Aizu are cities in Fukushima prefecture, and Aizu is included to check consumers’ sensitivity to a name itself rather than a prefecture. Chiba,

Hokkaido, and Niigata are included because they are widely available at the nation-wide supermarkets (AEON supermarkets) in Japan, and they have enough variation in their market values and their distances from the accident cite.

While three levels of radioactive inspection results are defined based on the government safe standard, the category of “under a half of the safe standard” does not exist in the reality. Similarly, all Fukushima rice has been inspected after the accident, and thus Fukushima rice with no inspection does not exist in the reality. We included these hypothetical options to answer two existing concerns about the benefit of the inspection:

1 Exchange rates at the time of the study were 1 USD = 110 JPY.

(1) whether a stricter safe standard is better appreciated by consumers, and (2) whether the benefit is larger than the cost of the inspection.

The base price for each product origin (the median price of the 5 levels) was obtained from the prices at AEON supermarkets (the nation-wide supermarket chain). We selected middle-class rice from each origin (i.e., Fukushima Hitomebore, Aizu

Hitomebore, Niigata Koshihikari (excluding Uonuma rice) 2 , Chiba Koshihikari,

Hokkaido Nanatsuboshi). The price levels were ranged from -20% to +20% of the base price for each origin. We used a different base price of each origin because the price varies substantially across origins. Chiba rice is the average rice, and Niigata rice has the highest reputation in Japan. Hokkaido rice used to be lower than the average but has been increasingly appreciated after the accident. Fukushima rice used to be the average rice but became below average after the accident. Aizu rice has been the above-average rice, and the impact of the accident is apparently smaller than Fukushima rice.

The choice sets consist of four hypothetical alternatives and a ‘no choice’ option

(Figure 2), and they were created using a D-optimal design created from the full-factorial candidate set using a modified Federov search algorithm. To reduce the probability of respondent fatigue, the choice sets were split into four orthogonal blocks of eight choice tasks each. We employed the cheap talk strategy to mitigate hypothetical bias and informed respondents that people tend to act differently when they face hypothetical decisions (Cummings and Taylor 1999).

Post Experiment Questions

2 “Uwonuma rice” is a brand rice from Niigata prefecture and is treated differently from other Niigata rice.

To investigate the degree of tolerance toward Fukushima rice, we ask a series of two questions after the choice experiment. First, for each of five product origins (conditional on satisfying the safe standard), we asked whether they purchase rice from the origin depending on price levels with four options: “Buy it even if it is expensive”, “Buy it if the price is fair”, “Buy it if it is cheap”, or “Do not buy it even if it is cheap”. People who select “Do not buy it even if it is cheap” are classified as no-tolerant consumers. To the no-tolerant consumers, we further ask about the most important reason for their no tolerance with five options: “less radioactive materials is better”, “cannot trust a radioactive inspection”, “whatever the reason is, it is better to avoid”, “do not know”, or

“others”. Then, we expect that their decisions are more emotional rather than ration if they select “whatever the reason is, it is better to avoid” or “do not know”. We examine the people who show their emotional avoidance (hereafter referred to as the stigma group) separately from the people who did not.

Following the questions, to measure consumers’ knowledge about and attitude toward radioactive materials, we ask nine questions about potential risks of radioactive materials through foods. At the end of the survey, we also collected the following background information: sex, age, household size, household demography, education level, annual household income level, average monthly food expenditure per person.

3. Study Sample and Data

We used Macromill, Inc., a leading online survey company in Japan, to conduct an online survey in March, 2016. The company maintains a panel of more than 1.16 million

Japanese consumers. Employing a stratified sampling method, we sampled from the company’s panel living in two areas: the Kanto area (Saitama, Chiba, and Kanagawa

Prefectures, and Tokyo Metropolis) and the Kinki area (Shiga, Kyoto, Osaka, Hyogo, and

Nara Prefectures). These two areas are two major commercial centers in Japan, and the

Kinki area is located about twice as far from the Fukushima accident cite than the Kanto area (e.g., the Kinki area is about 500-600 km away, and the Kanto area is about 200-300 km away). We set a target for the number of respondents based on the gender and age distribution (20 years old or older) in each survey area, and we sent random requests for participation. We targeted the respondents who regularly purchase rice for their household.

The survey was closed once the company obtained the desired number of respondents. In total, we obtained 512 valid responses who provided sufficient information (e.g., education and income levels), where 244 respondents are from the Kanto area and 268 respondents are from Kinki area.

Table 2 summarizes key characteristics of our analytical sample. About 60% of our sample are females because females are more likely to go grocery shopping for a household in Japan. The average age is 47 years old, and 42% of respondents have at least one child. Our respondents are on average better educated than the national average, and

73% of them graduated university while the national average is 50% in 2016 (Ministry of

Education, Culture, Sports, Science and Technology). Similarly, our sample underrepresents low-income households (household annual income < 2 million JPY) and well capture high-income households (household annual income > 10 million JPY), where the proportions of low- and high-income households are 7% and 11% in our sample while 20% and 12% in the national average in 2016 (Ministry of Health, Labor and

Welfare).

4. Estimation Strategy

To estimate the WTP, we employ mixed logit models (also called random parameters logit models) which allow different respondents to have different preferences and do not require the IIA property. Following Train (2009), the mixed logit probability of choosing the choice 푉푖푗푡 for individual 푖, alternative 푗 from the choice set 풮 in situation 푡 is given by

exp(훽푖′푋푖푗푡) P(푉 = 1|푋 , 푋 , … . 푋 , Ω) = ∫ 푓(훽|Ω)푑훽 푖푗푡 푖1푡 푖2푡 푖퐾푡 퐾 (1) ∑ exp(훽푖′푋푖푗푡) 푘=1 th where 푋푖푗푡 is a vector of attributes for the 푗 alternative, 훽푖~푓(훽|Ω) is a vector of individual-specific taste parameters, and the vector Ω defines the parameters characterizing the distribution of the random parameters. Equation (1) is estimated via simulated maximum likelihood estimation techniques. To operationalize the model in equation (1), we first assume the price coefficient to be constant while other coefficient parameters to be distributed normally (e.g., Revelt and Train 1998). Then, the mean WTP for an attribute k will be the mean coefficient for the attribute k divided by the price coefficient i.e., E(푊푇푃푘) = − 퐸(훽푘)⁄훽푝푟푖푐푒.

We first estimate a basic model with all sample. We then estimate the model for the Kanto and the Kinki areas separately. 푋푖푗푡 includes rice price per 5 kg, four indicators of product origins (Niigata is excluded), two indicators of inspection results (no label is excluded), and four alternative dummies (the “do not buy” position is excluded). The alternative dummies are included to control for the effect of the location of the choice on the questionnaire (e.g., the first choice on the left edge might be more likely to be selected than the last choice on the right edge). Our key interests are the WTP for the indicators of

Fukushima compared to other product origins, and the WTP for the indicators of “under the safe standard” label and “under a half of the safe standard” label compared to no label.

To investigate the influence of no tolerant consumers, we separate our sample into two groups: consumers who have no tolerance to Fukushima rice (the no-tolerant group) and other consumers (the tolerant group). We further examine consumers who have no tolerance with no specific reason (the stigma group), where the stigma group is a subsample of the no-tolerant group. We examine how the WTP of our interests are different across these groups. We separate consumers into the no-tolerant and the tolerant groups because their response to price changes may be systematically different. The difference is critical for the WTP approach which implicitly assumes all consumers are responsive to prices. Examining the stigma group, we investigate the response to price changes may be different even among the no-tolerant group depending on the reasons for no tolerance.

Lastly, we examine the impact of providing information (e.g., radiation exposure) on the WTP to Fukushima rice and the inspection results. We separately estimate the WTP for each of the three treatment groups, the placebo group, and the control group. The difference between the treatment group 1 and the placebo group is interpreted as the impact of providing radiation exposure. The differences between the treatment groups 2 and 3 and the placebo group are also examined as the effects of providing more information in addition to radiation exposure. We also examine the differences between the treatment groups and the control group as alternative measures of the effects of providing information.

5. Estimation Results

Tables 3 and 4 present the estimation results for a mixed logit model by regions and by consumer types, respectively. All coefficient estimates are statistically significant at the

5% level. The negative signs of the coefficient estimates for the four product origins indicate that the WTP for the four origins are lower than the WTP for Niigata rice (the most prestigious origin in Japan). The smaller absolute value of the estimate indicate that the WTP for the origin is closer to that for Niigata i.e., a higher WTP for the origin. Thus, our results show that the WTP for Fukushima is substantially lower than other origins, and the WTP for Niigata and Hokkaido are substantially higher than other origins. The

WTP for Aizu and Chiba are similar and in the middle. For example, for all sample, the

WTP for Fukushima and Hokkaido are 926 JPY and 302 JPY lower than Niigata, respectively (column 1 in Table 3). Across regions, the patterns are similar in both the

Kanto and Kinki areas (columns 2 and 3 in Table 3). In contrast, across consumer types, the WTP for the product origins of Fukushima, Aizu and Chiba compared to Niigata are much lower in the no-tolerance group (-2,324 JPY to -1,515 JPY) compared to the ordinary group (-629 JPY to -472 JPY), while the relative value of Hokkaido compared to Niigata is similar (Table 4). The stigma group shows similar patterns to those in the no-tolerance group.

The positive signs of the coefficient estimates for the inspection results indicate that the WTP becomes higher by labeling the inspection result compared to no label.

However, the WTP for the “under a half of the safe standard” label is slightly smaller than the WTP for the “under the safe standard” label even though the former label indicates a stricter inspection than the latter label. For example, for all sample, the WTP for “under a half of the safe standard” label is 327 JPY while the WTP for the “under the safe standard” label is 426 JPY (column 1 in Table 3). Across regions, the patterns are similar in both the Kanto and Kinki areas (columns 2 and 3 in Table 3). Across consumer types

(Table 4), while the patterns are similar, the WTP for the “under the safe standard” label

12 is slightly higher in the no-tolerance group (754 JPY) than the ordinary group (382 JPY).

The WTP for the inspection label in the stigma group (746 JPY) is similar to that in the no-tolerance group.

Using the results in Tables 3 and 4, Table 5 presents the average WTP for a 5kg pack of rice for each product origin. The WTP are computed for “under the safe standard” and alternative dummy 1. The first panel presets the results by regions, and the second panel presents the results by consumer types. In addition, the actual market prices at the survey time are listed on the bottom raw. That is, if the average WTP is lower than the market price, the rice has little chance to be purchase in the market.

The fist panel in Table 5 shows that the average WTP is the highest for Niigata rice (2,470 JPY) followed by Hokkaido rice (2,167 JPY) and is the lowest for Fukushima rice (1,544 JPY) which is almost 1,000 JPY lower than Niigata rice. The average WTP for Aizu and Chiba rice is in the middle (1,796 JPY and 1,756 JPY). The WTP for Aizu rice is 250 JPY higher than that for Fukushima rice even though both are produced in

Fukushima prefecture. Even so, the WTP for Fukushima and Aizu rice is lower than the market prices, and thus average consumers would not buy rice from Fukushima and Aizu.

In contrast, the WTP for Niigata, Hokkaido and Chiba rice is higher than the market prices, and thus average consumers would buy rice from Niigata, Hokkaido and Chiba. This is consistent with the fact that Fukushima rice and Aizu rice are hardly available outside

Fukushima prefecture (the market price is obtained from supermarkets in Fukushima prefecture), while rice from Niigata, Hokkaido and Chiba are widely available in Japan.

The second panel in Table 5 shows that the WTP for rice from Fukushima, Aizu and Chiba is substantially different between the no-tolerance group and the ordinary group. In particular, the WTP for Fukushima rice in the no-tolerance group (177 JPY) is

13 less than one tenth of that in the ordinary group (1,989 JPY). Similarly, the WTP for Aizu and Chiba rice in the no-tolerance group is less than a half of that in the ordinary group.

The WTP for rice from Fukushima, Aizu and Chiba are even lower in the stigma group than in the no-tolerance group. More importantly, the WTP for rice from all product origins, even the WTP for Fukushima rice, is higher than the market prices in the ordinary group. In the ordinary group, although Fukushima rice still has the lowest WTP, the WTP

(1,989 JPY) is higher than the WTP for all sample (1,544 JPY) and the market price

(1,922 JPY). That is, separating ordinary consumers from no-tolerant consumers, we found substantially different implication from that for all sample.

Effects of Providing Information

Table 6 presents the estimation results for the mixed logit model by the types of providing information for ordinary consumers, and Table 7 presents the results for no-tolerant consumers. While most coefficient estimates are statistically significant at the 5% level, some coefficient estimates for Hokkaido are statistically insignificant in both tables, and some coefficient estimates for inspection results are not statistically significant even at the 10% level in Table 7. Overall, we find moderate effects of providing information about radiation exposure on the WTP for Fukushima rice. First, the WTP for Fukushima is similar between the control and the placebo groups in both Table 6 (about -700 JPY) and

Table 7 (about -2,170 JPY), which indicates that informing about global warming has little effect on the attitude toward Fukushima rice among all consumers. Second, providing information about radiation exposure mitigates the negative WTP for

Fukushima among no-tolerant consumers while not among ordinary consumers. For example, the results for the Only RE group (column 3 in Table 6) show that the WPT for

Fukushima becomes -1,991 JPY among no-tolerant consumers while -740 JPY among ordinary consumers. Third, providing more information in addition to radiation exposure

(i.e., half-life or DNA recovery) further mitigates the negative WTP for Fukushima except for the RE+HL group among no-tolerant consumers. The WTP for Fukushima becomes -

1556 JPY in the RE+DNA group among no-tolerance consumers and -651 JPY and -561

JPY in the RE+HK group and the RE+DNA group among ordinary consumers, respectively. However, the WTP is worsened to -2,678 JPY in the RE+HL group among no-tolerant consumers.

The effects of providing information on the WTP for the inspection results are mixed. Among ordinary consumers, providing information about radiation exposure reduces the WTP for inspection results (319 JPY) compared to both the control and the placebo groups (361 JPY and 567 JPY). In contrast, among no-tolerant consumers, providing information about radiation exposure increases the WTP for inspection results

(776 JPY) compared to both the control and the placebo groups (410 JPY and 49 JPY).

Providing more information in addition to radiation exposure (i.e., half-life or DNA) has mixed effects on the WTP for inspection results, and no consistent patterns are observed.

Using the results in Tables 6 and 7, Table 8 presents the average WTP for a 5kg pack of rice by product origins and information types. The WTP are computed for “under the safe standard” and alternative dummy 1. The results show that providing information substantially decreases the WTP for all product origins among ordinary consumers. The decrease is mainly driven by changes in the coefficient estimates for alternative dummies.

That is, providing information substantially decreases overall willingness to buy rice. As a result, even though it improves the WTP for Fukushima, providing information decreases the average WTP for Fukushima rice even lower than the market price. In

15 contrast, among no-tolerant consumers, providing information improves the WTP for rice from Fukushima, Aizu and Chiba. However, the improvement is not large enough to exceed the market price. Thus, although providing information has some beneficial effects on the WTP for Fukushima, the influences are not large enough to change the purchasing behaviors of no-tolerant consumers.

6. Conclusions

Six years on from the Fukushima nuclear power plant accident, some consumers still avoid purchasing agricultural products from Fukushima prefecture even when their safety is scientifically guaranteed. The paper explicitly separated such consumers who excessively avoid Fukushima foods (no-tolerant consumers) from other ordinary consumers, and it investigated whether the WTP for Fukushima rice and the safety inspection result are systematically different between the two consumer types by conducting discrete choice experiments among Japanese grocery shoppers in 2016. We also examined how differently the two types of consumers are influenced by receiving additional scientific information.

We found that 33% of our sample are no-tolerant to Fukushima rice, and no- tolerant consumers would never buy Fukushima rice even with the “under the safe standard” label. In contrast, ordinary consumers may buy Fukushima rice with the safety standard label, while they would not buy it without the label. Moreover, without distinguishing the two consumer types, the result indicated that average consumers would not buy Fukushima rice even with the safety standard label, which might provide a misleading message that most people would not buy Fukushima rice. Lastly, we found that providing additional scientific information had little effect on improving the

16 demand for Fukushima rice.

Our findings imply that, when we use the WTP approach, it is important to check whether a food has any possibility to be stigmatized by some consumers. If there is such possibility, we may need to estimate the WTP for the food separately between no-tolerant consumers and ordinary consumers. Our findings also provide useful information to design policy related to food risk communications. Differently from previous findings (e.g., Ito and Kuriyama, 2016), labeling the safety inspection result seems important for ordinary consumers to purchase Fukushima rice. On the other hand, posting additional scientific information was not effective to change consumers’ demand. This may imply that, while one-way communication is effective to transfer simple risk information, one-way communication does not work (or can even be harmful) to transfer complex risk information. In other words, posting scientific information on website or distributing leaflets of the information may not be very effective. While interactive risk communication (i.e., two-way communication) can be more effective (Niiyama et al. 2013), it is often too costly for a large-scale implementation. Finding more effective and feasible risk communication is an important topic for future research.

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Niiyama, Yoko, Yayoi Kito, and Haruyo Kudo. 2013. “An experimental interactive risk communication on the health effects of radioactive substances in food.” An experimental interactive risk communication on the health effects of radioactive substances in food. pp55-58.

Piggott, N. E., and T. L. Marsh. 2004. “Does food safety information impact US meat demand?” American Journal of Agricultural Economics, 86(1):154-174.

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Rickard, B. J., J. Liaukonyte, H. M. Kaiser, and T. J. Richards. 2011. “Consumer response to commodity-specific and broad-based promotion programs for fruits and vegetables.” American Journal of Agricultural Economics, 93(5):1312-1327.

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Table 1: Attributes and Their Levels in Our Choice Experiment

Attribute Levels Contents 1. Product origin 5 levels Fukushima, Aizu, Chiba, Hokkaido, Niigata 2. Radioactive 3 levels No label, Inspection Result Below the Safe Standard, Below the half of the Safe Standard. 3. Price per 5kg (JPY) 5 levels for Fukushima: 1538, 1730, 1922, 2114, 2306 each origin Aizu: 1538, 1730, 1922, 2114, 2306 Chiba: 1322, 1487, 1652, 1817, 1982 Hokkaido: 1469, 1652, 1836, 2020, 2203 Niigata: 1710, 1924, 2138, 2352, 2566 Note: Exchange rates at the time of the study was USD1 was about USD110.

Table 2. Key Characteristics of Our Analytical Sample

Characteristics Mean SD Female (0-1) 0.59 0.5 Age (years) 47.4 14.0 Household size (persons) 2.6 1.2 With Any Child (0-1) 0.42 0.5

Education Primary (0-1) 0.02 0.5 High School (0-1) 0.25 0.5 University (0-1) 0.73 0.5 Household Income Low [< 2 million JPY] (0-1) 0.07 0.5 Middle [2 – 10 million JPY] (0-1) 0.82 0.5 High [> 10 million JPY] (0-1) 0.11 0.5

Number of respondents 512

Source: Authors’ data.

Table 3. Estimation Results by Residential Areas

All Kanto Kinki Fixed Coefficients Price (JPY) -0.003 -0.003 -0.003 Random Coefficients Mean SD Mean SD Mean SD Fukushima -2.55 1.03 -2.52 1.11 -2.39 0.73 Aizu -1.85 0.79 -1.83 -0.52 -1.74 0.15 Chiba -1.96 1.63 -1.86 1.80 -1.96 -1.30 Hokkaido -0.83 1.37 -0.77 1.30 -0.63 1.47 Under Safe Standard 1.17 0.95 1.27 0.81 1.17 1.16 Half Safe Standard 0.90 1.64 1.13 1.47 0.74 1.73 Alternative dummy 1 5.66 0.91 6.00 -0.75 5.53 -0.80 Alternative dummy 2 5.58 0.99 5.98 1.00 5.15 1.24 Alternative dummy 3 5.59 0.39 5.88 -0.60 5.29 -0.48 Alternative dummy 4 5.65 -0.36 5.96 -0.77 5.33 -0.52 Log likelihood -4997 -2320 -2620 Number of respondents 512 244 268 Number of Observations 20480 9760 10720 Note: Bold numbers are the estimates statistically significant at the 5% level.

Table 4. Estimation Results by Consumer Types

Ordinary No Tolerance Stigma Fixed Coefficient Price -0.003 -0.002 -0.001 Random Coefficients Mean SD Mean SD Mean SD Fukushima -1.82 0.51 -4.54 1.45 -4.18 0.09 Aizu -1.34 0.37 -3.06 0.57 -3.17 0.28 Chiba -1.37 1.26 -2.96 2.35 -3.23 3.14 Hokkaido -0.72 1.06 -0.56 2.14 -0.93 1.45 Under Safe Standard 1.11 0.94 1.47 1.32 1.04 0.94 Half Safe Standard 0.91 1.41 0.86 1.90 0.77 1.05 Alternative dummy 1 6.58 0.71 3.47 -0.27 2.94 -0.70 Alternative dummy 2 6.35 0.92 3.48 1.24 2.82 1.52 Alternative dummy 3 6.43 -0.21 3.34 0.13 2.54 -0.67 Alternative dummy 4 6.46 0.67 3.37 -0.63 2.99 1.17 Log likelihood -3290 -1452 -521 Number of respondents 341 171 60 Number of Observations 13640 6840 2400 Note: Bold numbers are the estimates statistically significant at the 5% level.

Table 5. Average Willingness to Pay Values for Product Origin (in Japanese Yen)

Willingness-to-pay Product origin (JPY per 5kg with Test) Fukushima Aizu Chiba Hokkaido Niigata (1) (2) (3) (4) (5) By All 1,544 1,796 1,756 2,167 2,470 Regions 95 CI [1317, 1771] [1593, 1998] [1553, 1959] [1975, 2359] [2709, 3084] Kanto 1,656 1,901 1,889 2,272 2,544 95 CI [1331, 1981] [1616, 2187] [1598, 2180] [2002, 2541] [2724, 3259] Kinki 1,531 1,775 1,691 2,187 2,424 95 CI [1211, 1851] [1492, 2057] [1400, 1983] [1906, 2469] [2582, 3138]

By Ordinary 1,989 2,154 2,145 2,370 2,618 Consumer 95 CI [1755, 2222] [1935, 2373] [1923, 2368] [2153, 2587] [2787, 3215] Types No tolerant 177 934 987 2,215 2,502 95 CI [-1062, 1416] [127, 1741] [249, 1725] [1630, 2800] [2639, 3875] Stigma -234 498 452 2,107 2,780 95 CI [-2662, 2194] [-1527, 2523] [-1568, 2473] [734, 3480] [2065, 4989]

Actual Mkt Price 1,922 1,922 1,652 1,836 2,138 (JPY per 5kg)

Note: the willingness to pays are computed for rice with below the safe standard. Bold numbers are the estimates statistically significant at the 5% level.

Table 6. Estimation Results by Information Types for Ordinary Consumers

Control Placebo Only RE RE+HL RE+DNA Fixed Coefficients Price -0.003 -0.003 -0.003 -0.004 -0.003 Random Coefficients Fukushima -2.10 -2.10 -1.88 -2.31 -1.82 Aizu -1.57 -1.23 -1.26 -1.47 -1.46 Chiba -2.06 -1.63 -1.57 -1.47 -1.70 Hokkaido -1.20 -0.52 -0.75 -0.72 -0.52 Under Safe Standard 1.21 1.62 0.81 1.05 1.77 Half Safe Standard 0.77 1.23 0.65 1.34 1.11 Alternative dummy 1 9.06 5.17 6.73 8.12 6.53 Alternative dummy 2 9.27 5.24 6.27 7.45 6.24 Alternative dummy 3 8.99 5.30 6.17 7.85 6.40 Alternative dummy 4 8.83 5.48 6.47 7.62 6.36 Log likelihood -652.02 -666.72 -727.09 -552.67 -553.62 Number of respondents 75 69 75 63 59 Number of Observations 3000 2760 3000 2520 2360 Note: RE = Daily radiation exposure, HL = Half-life of radioactive materials, and bDNA = DNA recovery. Bold numbers are the estimates statistically significant at the 5% level.

Table 7. Estimation Results by Information Types for No Tolerant Consumers

Control Placebo Only RE RE+HL RE+DNA Fixed Coefficients Price -0.003 -0.002 -0.003 -0.002 -0.003 Random Coefficients Fukushima -6.51 -6.46 -5.13 -4.86 -4.75 Aizu -2.94 -3.69 -4.12 -3.35 -3.10 Chiba -4.88 -4.11 -4.59 -3.20 -3.19 Hokkaido -0.02 -1.38 -1.13 -0.81 -0.25 Under Safe Standard 1.18 0.11 2.00 1.49 1.57 Half Safe Standard -0.58 1.60 2.10 0.60 0.99 Alternative dummy 1 4.22 5.14 5.07 3.23 4.75 Alternative dummy 2 3.69 4.83 4.24 3.34 5.44 Alternative dummy 3 4.64 4.92 4.48 3.54 4.93 Alternative dummy 4 4.34 4.35 5.05 3.15 4.74 Log likelihood -219.85 -291.42 -264.2 -313.24 -284.23 Number of respondents 28 35 33 37 38 Number of Observations 1120 1400 1320 1480 1520 Note: RE = Daily radiation exposure, HL = Half-life of radioactive materials, and bDNA = DNA recovery. Bold numbers are the estimates statistically significant at the 5% level.

Table 8. Average Willingness to Pay by Product Origins and Information Types Control Placebo Only RE RE+HL RE+DNA Ordinary Fukushima 2,426 1,684 2,107 1,839 1,960 Consumers 95% CI [1910, 2941] [1024, 2344] [1538, 2677] [1362, 2316] [1381, 2539] Aizu 2,583 1,991 2,352 2,074 2,070 95% CI [2093, 3073] [1412, 2569] [1835, 2870] [1625, 2524] [1521, 2619] Chiba 2,439 1,848 2,227 2,074 1,997 95% CI [1912, 2965] [1258, 2439] [1660, 2794] [1617, 2532] [1443, 2551] Hokkaido 2,694 2,238 2,553 2,288 2,360 95% CI [2211, 3178] [1643, 2833] [2015, 3092] [1846, 2731] [1820, 2899] Niigata 3,050 2,419 2,848 2,491 2,522 95% CI [2694, 3050] [2001, 2837] [2491, 3205] [2183, 2798] [2149, 2895] No Tolerant Fukushima -383 -669 613 -30 583 Consumers 95% CI [-3023, 2257] [-2752, 1414] [-1075, 2302] [-2347, 2287] [-702, 1869] Aizu 855 538 1,007 804 1,125 95% CI [-465, 2175] [-873, 1949] [-394, 2407] [-1082, 2690] [68, 2181] Chiba 184 354 823 885 1,096 95% CI [-1378, 1745] [-1039, 1748] [-653, 2299] [-904, 2673] [101, 2091] Hokkaido 1,870 1,548 2,166 2,201 2,058 95% CI [755, 2984] [524, 2572] [1085, 3247] [669, 3733] [1130, 2986] Niigata 1,875 2,149 2,605 2,649 2,140 95% CI [1096, 2654] [1432, 2865] [1831, 3378] [1673, 3624] [1537, 2744] Note: RE = Daily radiation exposure, HL = Half-life of radioactive materials, and bDNA = DNA recovery.

Figure 1. Locations of the Fukushima Nuclear Power Plant Accident and the Product Origins of Rice

Figure 2. Sample Choice Experiment Questions

Rice A Rice B Rice C Rice D (5 kg) (5 kg) (5 kg) (5 kg) Do Not Buy Any Rice

Year Year Year Year 2015 2015 2015 2015

５㎏５㎏

Product Origin Fukushima Hokkaido Chiba Aizu

Radioactive Below Below a Half of Inspection the Safe Standard the Safe Standard Result

Price per 5kg JPY 2300 JPY 2200 JPY 2010 JPY 2110 (Tax included)

Choose only one