Establishing WTP(willingness-to-pay) for reductions in risk to life from an emerging environmental or food hazard may be impeded because precise statistical estimates of the risk are unavailable. Although BSE(bovine spongiform encephalopathy) and its human equivalent CJD(Creutzfeldt-Jakob disease) have led to a crisis on an international scale, even in the United Kingdom, epidemiologists do not have sufficient data to make precise risk estimates. Depending on assumptions the CJD epidemic is anticipated to claim somewhere between 75 and 80,000 lives in the UK.

For emerging risks of this nature precise estimates may only be known until the catastrophe is well advanced. In the short term it may be difficult to separate ´scaresª(where minimal risks are exaggerated) from genuinely significant risks. Long before statistical risks are established consumers may react to whatever risk information is available and their reactions may be detectable in market behaviour towards an affected product, in this case beef.

Our study investigates the international diffusion of health risk information and its effect directly on demand for beef and indirectly on WTP for reduction in BSE related risk. Following the UK government announcement of a possible link between BSE and CJD in March 1996 an upsurge of health risk information in the UK mass media was followed by a similar upsurge two months later in Korea. The effect of this information on market behaviour in Korea has nevertheless been significant.

We model the volume of risk information published each month and its effect on market demand establishing sales loss and estimate WTP for reduction in the BSE related risk associated with beef consumption. Using a range of international estimates for the Value of Statistical Life we can derive estimates for the implicit risk to life which Korean consumers attribute to consumption of imported beef. Comparing these estimates with the epidemiological risk statistics for the UK suggests that Korean market behaviour is highly risk averse.