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Consumer Confidence in the Food System, Media Coverage and Stock Prices for the Food Industry

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Listed:
  • Garcia-Fuentes, Pablo
  • Ferreira, Gustavo
  • Harrison, R. Wes
  • Kinsey, Jean D.
  • Degeneffe, Dennis

Abstract

Ongoing food safety incidents have generated a national interest in the significant costs that food recalls impose on stakeholders. This paper examines the impact of media coverage of food safety events on consumer confidence in food safety, and measures the response of stock prices of food companies to changes in consumer confidence. Results show that increases in media coverage have a negative impact on consumer confidence, and that decreases in the levels of consumer confidence regarding food safety have a negative impact on a stock price index for a basket of food companies. These findings suggest that financial performance of food companies is generally and negatively affected by food safety events, even though the event may be company and/or category-specific in nature.

Suggested Citation

  • Garcia-Fuentes, Pablo & Ferreira, Gustavo & Harrison, R. Wes & Kinsey, Jean D. & Degeneffe, Dennis, 2014. "Consumer Confidence in the Food System, Media Coverage and Stock Prices for the Food Industry," Journal of Food Distribution Research, Food Distribution Research Society, vol. 45(2), pages 1-20, July.
    • Handle: RePEc:ags:jlofdr:186923
    DOI: 10.22004/ag.econ.186923
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