VALUING AMBIGUITY - THE CASE OF GENETICALLY-ENGINEERED GROWTH ENHANCERS

A split-valuation method is developed and implemented to elicit the wi llingness to pay to consume-or avoid consuming-a product of ambiguous quality. The split-valuation method uses experimental auction markets to separate and value the positive and negative attributes of the ambi guous good. The results show that the method can be used to successful ly value a good of ambiguous quality. Our application reveals that for a sample of students at a midwestern land-grant institution, the aver age respondent is willing to pay a premium for meat produced with the use of a genetically engineered growth enhancer that has 30% to 60% fe wer calories and is 10% to 20% leaner.