IDEAS home Printed from https://ideas.repec.org/a/eee/jfpoli/v114y2023ics0306919222001671.html
   My bibliography  Save this article

Recall information heterogeneity and perceived health risk: The impact of food recall on fresh meat market in the U.S

Author

Listed:
  • Zhou, Pei
  • Liu, Yizao

Abstract

This paper examines the heterogeneous impact of various recall information on consumers’ perceived health risks and quantifies the overall impact of food recalls on demand. Using the fresh meat market as a case study, this paper formulates a structural random coefficient discrete choice model of consumer demand. Among various characteristics of food recalls, our focuses are the number of recalls and the volume of food recalled. In addition to the latest recall information, the historical recall information may also change consumers’ perception of health risks and we include the interaction terms of the historical recall information and the latest recall information into the model. Results show that both the number of recalls and the volume of food recalled have negative and significant effects on the demand. Historical recalls are also important to mitigate the negative impact of the latest recalls on the market. To minimize the negative impact of recalls, the highest priority should be given to preventing large-scale recalls, Class I recalls, product contamination recalls, and recalls due to being produced without benefit of inspection or import violation. Food companies should take the initiative to recall when problems arise. Further, simulation results imply that the number of recalls plays a much larger role than the volume of food recalled in meat demand.

Suggested Citation

  • Zhou, Pei & Liu, Yizao, 2023. "Recall information heterogeneity and perceived health risk: The impact of food recall on fresh meat market in the U.S," Food Policy, Elsevier, vol. 114(C).
    • Handle: RePEc:eee:jfpoli:v:114:y:2023:i:c:s0306919222001671
    DOI: 10.1016/j.foodpol.2022.102398
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306919222001671
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.foodpol.2022.102398?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Chantal Toledo & Sofia Berto Villas-Boas, 2019. "Safe or Not? Consumer Responses to Recalls with Traceability," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(3), pages 519-541, September.
    2. Li, Tongzhe & Bernard, John C. & Johnston, Zachary A. & Messer, Kent D. & Kaiser, Harry M., 2017. "Consumer preferences before and after a food safety scare: An experimental analysis of the 2010 egg recall," Food Policy, Elsevier, vol. 66(C), pages 25-34.
    3. Bakhtavoryan, Rafael & Capps, Oral, Jr. & Salin, Victoria, 2012. "Impact of Food Contamination on Brands: A Demand Systems Estimation of Peanut Butter," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 41(3), pages 1-13, December.
    4. Nevo, Aviv, 2001. "Measuring Market Power in the Ready-to-Eat Cereal Industry," Econometrica, Econometric Society, vol. 69(2), pages 307-342, March.
    5. Thomas Marsh & Ted Schroeder & James Mintert, 2004. "Impacts of meat product recalls on consumer demand in the USA," Applied Economics, Taylor & Francis Journals, vol. 36(9), pages 897-909.
    6. Wolfram Schlenker & Sofia B. Villas-Boas, 2009. "Consumer and Market Responses to Mad Cow Disease," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1140-1152.
    7. Bakhtavoryan, Rafael & Capps, Oral & Salin, Victoria, 2014. "The Impact of Food Safety Incidents Across Brands: The Case of the Peter Pan Peanut Butter Recall," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 46(4), pages 559-573, November.
    8. Matthew Houser & Jeffrey H Dorfman & Roderick M Rejesus, 2019. "The Long‐Term Effects of Meat Recalls on Futures Markets," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(2), pages 235-248, June.
    9. Taylor, Mykel & Klaiber, H. Allen & Kuchler, Fred, 2016. "Changes in U.S. consumer response to food safety recalls in the shadow of a BSE scare," Food Policy, Elsevier, vol. 62(C), pages 56-64.
    10. Bakhtavoryan, Rafael & Capps, Oral, Jr. & Salin, Victoria, 2014. "Dynamics of Consumer Response to Food Contamination: The 2007 Peanut Butter Recall," Journal of Food Distribution Research, Food Distribution Research Society, vol. 45(2), pages 1-16, July.
    11. Cohen, Andrew, 2008. "Package size and price discrimination in the paper towel market," International Journal of Industrial Organization, Elsevier, vol. 26(2), pages 502-516, March.
    12. Schlenker, Wolfram & Villas-Boas, Sofia, 2009. "AJAE appendix for ‘Consumer and Market Responses to Mad-Cow Disease’," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 91(4), pages 1-12, March.
    13. Shang, Xia & Tonsor, Glynn T., 2017. "Food safety recall effects across meat products and regions," Food Policy, Elsevier, vol. 69(C), pages 145-153.
    14. Michael R. Thomsen & Andrew M. McKenzie, 2001. "Market Incentives for Safe Foods: An Examination of Shareholder Losses from Meat and Poultry Recalls," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 526-538.
    15. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
    16. Bakhtavoryan, Rafael & Capps, Oral & Salin, Victoria & Dallakyan, Aramayis, 2018. "The Use of Time-Series Analysis in Examining Food Safety Issues: The Case of the Peanut Butter Recall," Journal of Food Distribution Research, Food Distribution Research Society, vol. 49(2), July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wu, Karin, 2023. "Media Impact on Consumer Purchasing Decisions: Evidence from Avian Influenza," 2023 Annual Meeting, July 23-25, Washington D.C. 335852, Agricultural and Applied Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chantal Toledo & Sofia Berto Villas-Boas, 2019. "Safe or Not? Consumer Responses to Recalls with Traceability," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(3), pages 519-541, September.
    2. Ollinger, Michael & Houser, Matthew, 2020. "Ground beef recalls and subsequent food safety performance," Food Policy, Elsevier, vol. 97(C).
    3. Matthew Houser & Berna Karali, 2020. "How Scary Are Food Scares? Evidence from Animal Disease Outbreaks," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(2), pages 283-306, June.
    4. Taylor, Mykel & Klaiber, H. Allen & Kuchler, Fred, 2016. "Changes in U.S. consumer response to food safety recalls in the shadow of a BSE scare," Food Policy, Elsevier, vol. 62(C), pages 56-64.
    5. Li, Huashan & Bapuji, Hari & Talluri, Srinivas & Singh, Prakash J., 2022. "A Cross-disciplinary review of product recall research: A stakeholder-stage framework," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 163(C).
    6. Pozo, Veronica F. & Schroeder, Ted C., 2016. "Evaluating the costs of meat and poultry recalls to food firms using stock returns," Food Policy, Elsevier, vol. 59(C), pages 66-77.
    7. Matthew Houser & Jeffrey H Dorfman & Roderick M Rejesus, 2019. "The Long‐Term Effects of Meat Recalls on Futures Markets," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(2), pages 235-248, June.
    8. Adam Dvir, 2022. "Is mass media an effective channel for conveying nutritional information? Welfare implications of the WHO classification of processed meats as carcinogenic on consumers in Israel," French Stata Users' Group Meetings 2022 21, Stata Users Group.
    9. Rosa Ferrer Zarzuela & Helena Perrone, 2017. "Consumers’ costly responses to product-harm crises," Economics Working Papers 1571, Department of Economics and Business, Universitat Pompeu Fabra.
    10. Liu, Yizao & Lopez, Rigoberto A. & Zhu, Chen, 2014. "The Impact of Four Alternative Policies to Decrease Soda Consumption," Agricultural and Resource Economics Review, Cambridge University Press, vol. 43(1), pages 53-68, April.
    11. Yonezawa, Koichi & Richards, Timothy J., 2016. "Competitive Package Size Decisions," Journal of Retailing, Elsevier, vol. 92(4), pages 445-469.
    12. Dai, Jiawu & Li, Xun & Wang, Xiuqing & Yu, Qiushuo & Mao, Xiaojie, 2015. "Food Scares, Market Power and Farm-Retail Price Spread: The Case of Pork Market in China," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205121, Agricultural and Applied Economics Association.
    13. Sanatan Shreay & Hayley H. Chouinard & Jill J. McCluskey, 2016. "Product Differentiation by Package Size," Agribusiness, John Wiley & Sons, Ltd., vol. 32(1), pages 3-15, January.
    14. Donna, Javier D. & Pereira, Pedro & Pires, Tiago & Trindade, Andre, 2018. "Measuring the Welfare of Intermediaries in Vertical Markets," MPRA Paper 90465, University Library of Munich, Germany.
    15. Irz, Xavier & Mazzocchi, Mario & Réquillart, Vincent & Soler, Louis-Georges, 2015. "Research in Food Economics: past trends and new challenges," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 96(01), pages 187-237, March.
    16. Wu, Karin, 2023. "Media Impact on Consumer Purchasing Decisions: Evidence from Avian Influenza," 2023 Annual Meeting, July 23-25, Washington D.C. 335852, Agricultural and Applied Economics Association.
    17. Bakhtavoryan, Rafael & Capps, Oral, Jr. & Salin, Victoria, 2016. "Times Series Analysis of the Peanut Butter Demand in Light of the Food Safety Issue," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235621, Agricultural and Applied Economics Association.
    18. Rosa Ferrer & Helena Perrone, 2023. "Consumers’ Costly Responses to Product-Harm Crises," Management Science, INFORMS, vol. 69(5), pages 2639-2671, May.
    19. Neill, Clinton L. & Chen, Susan E., 2021. "Food Safety Events versus Media: Nonlinear Effects of Egg Recalls on U.S. Egg Prices," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 47(1), January.
    20. Bakhtavoryan, Rafael & Capps, Oral, Jr. & Salin, Victoria, 2014. "Dynamics of Consumer Response to Food Contamination: The 2007 Peanut Butter Recall," Journal of Food Distribution Research, Food Distribution Research Society, vol. 45(2), pages 1-16, July.

    More about this item

    Keywords

    Food recall; Meat market; Number of recalls; Volume of food recalled;
    All these keywords.

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jfpoli:v:114:y:2023:i:c:s0306919222001671. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/foodpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.