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Food Safety and Habits in U.S. Meat Demand under Rational Expectations

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  • Zhen, Chen
  • Wohlgenant, Michael K.

Abstract

A consumer life-cycle demand system is built to investigate the presence of rational habits and the effects of food safety information on U.S. meat consumption. Information extracted from the popular press coverage of food safety events is used to approximate consumers' "true" perception of food safety. At quarterly frequencies, U.S. meat demand is found to be intertemporally nonseparable. During the post-1998 period, habit persistence is found to dominate inventory adjustment in beef demand. In general, food safety information is found to adversely affect meat demand. The ongoing research focuses on numerical simulations of consumer responses to alternative food safety event scenarios to evaluate the economic significance of food safety information and habit formation in U.S. meat demand.

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Bibliographic Info

Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2006 Annual meeting, July 23-26, Long Beach, CA with number 21287.

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Date of creation: 2006
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Handle: RePEc:ags:aaea06:21287

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Keywords: Food Consumption/Nutrition/Food Safety;

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  3. Carrasco, Raquel & Labeaga Azcona, J Maria & López-Salido, J David, 2002. "Consumption and Habits: Evidence from Panel Data," CEPR Discussion Papers 3520, C.E.P.R. Discussion Papers.
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  10. Nicholas E. Piggott & Thomas L. Marsh, 2004. "Does Food Safety Information Impact U.S. Meat Demand?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 154-174.
  11. Holt, Matthew T & Goodwin, Barry K, 1997. "Generalized Habit Formation in an Inverse Almost Ideal Demand System: An Application to Meat Expenditures in the U.S," Empirical Economics, Springer, vol. 22(2), pages 293-320.
  12. John D. Jackson, 1997. "Effects of Health Information and Generic Advertising on U.S. Meat Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 13-23.
  13. Spencer Henson & Mario Mazzocchi, 2002. "Impact of Bovine Spongiform Encephalopathy on Agribusiness in the United Kingdom: Results of an Event Study of Equity Prices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 370-386.
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