Perceived Hazard and Product Choice: An Application to Recreational Site Choice

We develop a perceived hazard model that estimates consumers\u27 endogenous risk perceptions about products. These perceptions are then linked to a model of product choice. Our approach thus departs from the expected utility model that depends upon external risk assessments. In an application to recreational fishing, we find that anglers\u27 perceived hazards associated with fish consumption advisories do affect product (recreational site) choice. Anglers\u27 perceptions also affect welfare measures because the benefits of contaminant removal flow from these perceptions. The perceived hazard/product choice model is applicable to a wide variety of risky choices consumers face