Consumer Acceptance of Recombinant Bovine Growth Hormone: Interplay Between Beliefs and Perceived Risks

Since 1920, it has been known that the naturally occurring bovine growth hormone (bGH) increases milk production in dairy cows. However, not until 1973 with the advent of recombinant DNA technology was it possible to produce synthetic bovine growth hormone (rbGH) cost effectively and inject rbGH into lactating cows to increase milk production. Although the Food and Drug Administration has stated that rbGH is safe for human consumption (CAST 1993), the synthetic hormone has sparked controversy. Farmers, producers, policymakers, and consumers are debating whether, and if so what, differences exist between the synthetic bovine growth hormone (rbGH) and the natural bovine growth hormone (bGH). According to rbGH producers, their product offers increased milk production. However, their focus on the market's supply side did not adequately prepare rbGH's manufacturers for consumers' skepticism toward rbGH. Deep-rooted consumer beliefs that milk is a pure, wholesome product (Busch 1991) have created an obstacle to acceptance of rbGH use. This paper examines whether consumers overestimate risk from rbGH and what factors could contribute to that assessment. A theoretical model is proposed and survey data are used to estimate the factors contributing to overestimation of risk. Some studies (Fine, Travis and Associates 1986; Hoban and Woodrum 1990; McGuirk, Preston, and Jones 1990; Smith 1989) have discussed consumer resistance to rbGH due to a lack of information about and understanding of the new technology. These authors believe education would reduce resistance to acceptance. This paper focuses on examining consumer beliefs in order to assess whether an education campaign would be an effective means to achieve consumer acceptance of rbGH. After reviewing the literature, a model is formulated to assess consumer perception of risks associated with rbGH. Using Wisconsin consumer survey data, results of empirical analysis are presented with a discussion of policy implications. LITERATURE REVIEW Although the Food and Drug Administration (FDA) has reviewed and approved industry studies documenting the safety of food products from animals treated with rbGH, consumers remain apprehensive (Juskevich and Guyer 1990). Several factors influence consumers' beliefs about rbGH. Consumers have strong beliefs in the wholesomeness of milk produced without rbGH (Busch 1991). They are faced with being involuntarily exposed to an artificial, unfamiliar product (Hadden 1989), and they are faced with a lack of understandable communication from, and trust in, regulatory enforcement agencies (Harlander 1991). Consumers believe that milk is wholesome, nutritious, and good for everyone. This has been reinforced by advertisements from the National Dairy Promotion and Research Board (NDPRB) (Busch 1991), a group sponsored by dairy farmers to promote that image. In addition, studies have found that people are willing to accept greater "natural" product risks than synthetic product risks (Busch 1991). That is, consumers assign greater risk to products that are controlled by someone or something other than nature. These perceptions are further exacerbated if the synthetic product poses risks that they either do not understand or feel they cannot control (Hohenemser and Kasperson 1982). As Hadden points out, laypeople view risk as not simply probability and outcome, but "a multifaceted concept that includes perhaps 20 other characteristics" (1989, 141). Hadden (1989) calls these other characteristics "outrage" factors. These "outrage" characteristics include voluntary or involuntary, familiar or unfamiliar, immediate or delayed effects, natural or artificial, controlled by the individual or by someone else, and visible benefits or no visible benefits. In each pair the first characteristic is associated with less risk and is thus a more tolerable risk than the latter characteristic. "Outrage" factors influencing risk perception have been underestimated by rbGH supporters. …