The Welfare Value of FDA’s Mercury-in-Fish Advisory: A Dynamic Reanalysis

Assessing the welfare impact of consumer health advisories is a thorny task. Recently, Shimshack and Ward (2010) studied how U.S. households responded to FDA’s 2001 mercury-in-fish advisory. They found that the average at-risk household reduced fish consumption by about 24%, resulting in a 21%-reduction in mercury exposure at the cost of a 28%-reduction in cardioprotective omega-3 fatty acids. A rough assessment of the health costs and benefits led Shimshack and Ward to conclude that the advisory policy resulted in an overall consumer welfare loss. In this note, we propose a more comprehensive assessment that links the long term cardiovascular health effects of the advisory policy to life cycle consumption. In addition to mortality risk, our model values the loss in health quality from non-fatal cardiovascular diseases. Using the same dose-response relationships as Shimshack and Ward, we find that the expected health and mortality loss to the average at-risk household is much larger than they suggested. The analysis highlights the importance of accounting for dynamic effects when evaluating persistent changes in exposure to environmental health risks.