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Long-Run Effects From Consumer Reaction To The Spread Of Foodborne Pathogens: The Case Of E. Coli Contamination Of Beef At Jack In The Box Restaurants

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  • Zhen, Chen
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    Abstract

    Using news coverage of food safety as an indicator of public attention to food pathogen issues in meat products, we found the 1993 E. coli O157:H7 contamination of hamburgers likely permanently changed consumers' perception of beef safety. A food consumption model with rational habit persistence is developed to examine whether consumers make forward-looking consumption decisions accounting for expectations of future food safety. We document clear evidence of forward-looking consumption behavior, which suggests that government regulations implemented subsequent to the 1993 event to protect consumers from ignorance or cognitive defects may be ineffective.

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    File URL: http://purl.umn.edu/51341
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    Bibliographic Info

    Paper provided by International Association of Agricultural Economists in its series 2009 Conference, August 16-22, 2009, Beijing, China with number 51341.

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    Date of creation: 2009
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    Handle: RePEc:ags:iaae09:51341

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    Web page: http://www.iaae-agecon.org/
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    Related research

    Keywords: food safety; habit persistence; linear rational expectations model; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; D12; D18;

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    1. Perron, P. & Bai, J., 1995. "Estimating and Testing Linear Models with Multiple Structural Changes," Cahiers de recherche 9552, Universite de Montreal, Departement de sciences economiques.
    2. 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.
    3. 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.
    4. Starke, Yolanda & Ralston, Katherine L. & Brent, C. Philip & Riggins, Toija & Lin, Chung-Tung Jordan, 2002. "Consumer Food Safety Behavior: A Case Study In Hamburger Cooking And Ordering," Agricultural Economics Reports 34061, United States Department of Agriculture, Economic Research Service.
    5. Anderson, Gary & Moore, George, 1985. "A linear algebraic procedure for solving linear perfect foresight models," Economics Letters, Elsevier, vol. 17(3), pages 247-252.
    6. Paolo Zagaglia, 2005. "Solving Rational-Expectations Models through the Anderson-Moore Algorithm: An Introduction to the Matlab Implementation," Computational Economics, Society for Computational Economics, vol. 26(1), pages 91-106, August.
    7. Carter, Colin A. & Smith, Aaron D., 2004. "The Market Effect of a Food Scare: The Case of Genetically Modified StarLink Corn," Working Papers 11997, University of California, Davis, Department of Agricultural and Resource Economics.
    8. Hall, Alastair R., 2004. "Generalized Method of Moments," OUP Catalogue, Oxford University Press, number 9780198775201.
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