The Economic Effects of in the Mid-Atlantic Region

Timothy C. Haab, Ohio State University John C. Whitehead, University of at Wilmington George R. Parsons, University of Delaware James Kirkley, Virginia Institute of Marine Science Doug Lipton, University of

With Contributions by Ash Morgan, University of Delaware; Isaac Kwakye and Emily Boyd, East Carolina University

May, 2002

This work was (partially) supported by Grant NA86RG0036 from the National Sea Grant College Program, National Oceanic and Atmospheric Administration to the North Carolina Sea Grant College Program.

Acknowledgements

The authors would like to thank Bob Christian (Department of Biology, East Carolina University) for helpful comments on the survey instrument, Vernon Kelley for the conduct of in-person interviews, and Paul Hindsley for research assistance.

i Executive Summary

In 1992 researchers at North Carolina State University identified Pfiesteria Piscicida (Pfiesteria) as one possible cause of fish kills in eastern North Carolina’s system (Burkholder et al.). Pfiesteria is a single-celled microorganism that lies dormant in the sediment of fresh and brackish water , but in combination with high nutrient concentrations potentially becomes a toxic predator of a number of local fish species (see Appendix A for a literature review). Recently, Pfiesteria has been linked to fish kills in Virginia, Maryland and Delaware. In addition to the scientific questions concerning the effects of Pfiesteria on the ecological health of the Mid-Atlantic region’s estuary system, public perception of Pfiesteria and other harmful algal blooms has the potential to impose significant economic losses on the region. Lost use of recreational resources, lost tourism revenues, decreased consumption of seafood, lost fishing time due to estuary closures, possible medical costs for treatment and increased regulation on industries that impact the estuary systems all represent decreases in the economic welfare to the Mid-Atlantic region.

This report summarizes a Mid-Atlantic (North Carolina, Virginia, Maryland and Delaware) study of seafood consumption combining both revealed and contingent behavior questions. As the available economic impact studies show, the seafood industry has been significantly impacted by recent Pfiesteria outbreaks in Maryland and North Carolina. Popular media coverage of Pfiesteria outbreaks has lead to substantial decreases in seafood purchases despite lack of scientific evidence linking these outbreaks to human illness. Because, at the time of this study, the scientific links between Pfiesteria and human health effects are not fully understood, the changes in behavior from outbreaks are driven by the information conveyed to the consumers through the popular media and word of mouth. As such, this study provides a better understanding of how consumers in the mid-Atlantic region respond to negative information about the risks associated with seafood consumption and what types of counter-information can be successful in alleviating the uncertainty associated with these risks.

The study was conducted using a phone-mail-phone survey of approximately 1,800 seafood consumers in North Carolina, Virginia, Maryland, Delaware and Washington, D.C. The initial phone survey elicits attitudinal and knowledge data about Pfiesteria and seafood safety from seafood consumers. The perceived qualitative and quantitative risks of seafood consumptions are also elicited along with a baseline measure of seafood consumption. The mail portion of the survey consists of a split sample information treatment that includes some or all of the following: An informational brochure about the current state of knowledge regarding Pfiesteria and seafood safety, coun