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Market Response to a Food Safety Shock: The 2006 Foodborne Illness Outbreak of E. coli O157:H7 Linked to Spinach

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Author Info

  • Arnade, Carlos A.
  • Calvin, Linda
  • Kuchler, Fred

Abstract

In 2006 FDA announced that consumers should not eat fresh spinach in the wake of a large foodborne illness outbreak of E. coli O157:H7. This paper investigates response of consumers to the announcement. We use an AIDS demand model with 5 food safety shock variables and retail scanner data to analyze market response. Even fifteen months after the outbreak, predicted sales of spinach in bags were still down 10 percent from what they would have been in the absense of the food safety shock. After the outbreak, consumers shifted to other leafy greens such as bulk iceberg lettuce, other bulk lettuce, and bagged salads without spinach.

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Bibliographic Info

Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida with number 6448.

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Date of creation: 2008
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Handle: RePEc:ags:aaea08:6448

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Keywords: Food Consumption/Nutrition/Food Safety;

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  1. Calvin, Linda, 2007. "Outbreak Linked to Spinach Forces Reassessment of Food Safety Practices," Amber Waves, United States Department of Agriculture, Economic Research Service, June.
  2. Arnade, Carlos & Pick, Daniel, 1998. "Seasonality and unit roots: the demand for fruits," Agricultural Economics, Blackwell, vol. 18(1), pages 53-62, January.
  3. Richards, Timothy J. & Patterson, Paul M., 1999. "The Economic Value Of Public Relations Expenditures: Food Safety And The Strawberry Case," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(02), December.
  4. Kuchler, Fred & Tegene, Abebayehu, 2006. "Did Bse Announcements Reduce Beef Purchases?," Economic Research Report 7251, United States Department of Agriculture, Economic Research Service.
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Cited by:
  1. Bakhtavoryan, Rafael & Capps, Oral, Jr. & Salin, Victoria, 2012. "Impact Of Food Contamination On Brands: A Demand Systems Estimation Of Peanut Butter," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123755, Agricultural and Applied Economics Association.
  2. Maria Aguiar Fontes & Eric Giraud-Héraud & Alexandra Seabra Pinto, 2013. "Consumers' behaviour towards food safety: A litterature review," Working Papers hal-00912476, HAL.
  3. Pouliot, Sebastien, 2011. "The FDA Food Safety and Modernization Act and the Exemption for Small Firms," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103885, Agricultural and Applied Economics Association.

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