Wednesday, June 15, 2016

Stigma mitigation and the importance of redundant treatments

• Spring water is contaminated with a dead sterilized cockroach.
• Experimental results provide measurements of the stigma of disgust.
• Results reveal large differences between stated and revealed preferences.
• Disgust is significantly reduced through simple mitigation steps.
• Multiple mitigation steps are more effective than single steps.

Disgust can evoke strong behavioral responses. Sometimes these extreme visceral responses can lead to stigmatization—an overreaction to a risk. In fact, disgust may be so inhibiting that it leads people to refuse to consume completely safe items, such as treated drinking water, leading to important economic and policy implications. Using economic experiments, we provide a measure of the behavioral response to disgust. Our findings suggest that when monetary incentives are provided, the behavioral response may have been exaggerated by previous studies that have relied on survey methods. Furthermore, mitigation steps successfully reduce the stigma behavior. In fact, the results suggest that stigma is primarily reduced not by a specific mitigation step taken but by how many steps are taken consecutively. These results have important implications for policies addressing issues such as the global shortage of drinking water. Some efforts to resolve the shortage have involved recycled water that is completely safe to drink but is often rejected because of reactions of disgust.

We find that participants require $0.385 on average to drink a three-ounce cup of spring water. Most participants (89%), however, required no compensation to drink spring water. The average WTA (Willingness to Accept) for spring water that had been in contact with the cockroach was much higher, $3.70, but interestingly, the majority of participants (68%) still required no compensation to drink it. This result indicates that cockroach-contaminated water does evoke stigma for some people, as indicated by their overreaction to the participatory risk associated with drinking this water. However, the stigma response is far less extreme than indicated in previous studies that relied on hypothetical questioning. In fact, we find that only 13 participants (14%) refuse the cockroach-contaminated water as indicated by their WTA of $30.00. All other participants are willing to drink it, albeit at a price. When we compare cockroach-contaminated water after a single mitigation step to cockroach-contaminated water, we find that overall WTA drops well below $3, with diluting being the lowest at $2.39. We conclude, that a single mitigation step may alleviate some but not all of the consumers’ concerns about the contamination. Looking at two mitigation steps, three of the six mean WTAs are below $2 dollars and two mean WTAs are below offers made for one mitigation step, suggesting that, overall, two mitigation steps may be more effective than one. All mean WTAs were below $2 for three and four mitigation steps.
contaminated water 
by Maik Kecinski 1, Deborah Kerley Keisner 2, Kent D. Messer 1, William D. Schulze 2
1. Department of Applied Economics and Statistics, University of Delaware, Newark, DE 19716, United States
2. Dyson School for Applied Economics and Management, Cornell University, Ithaca, NY 14850, United States
Journal of Economic Psychology via Elsevier Science Direct
Volume 54; June, 2016; Pages 44–52
Keywords: Disgust; Stigma mitigation; Risk; Experimental economics

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