IDEAS home Printed from https://ideas.repec.org/p/ags/saea17/252837.html
   My bibliography  Save this paper

Examining the Effect of Food Recalls on Demand: The Case of Ground Beef in the U.S

Author

Listed:
  • Zare, Samane
  • Zheng, Yuqing
  • Buck, Steven

Abstract

Using Nielson retail scanner dataset and applying difference-in-difference approach and synthetic control method, we test whether consumers in Utah reduced beef purchases after 2009 Salmonella outbreak of ground beef products. The result of DID approach indicates that the Salmonella event reduced ground beef purchases in Utah by 17% in four weeks after the recall. Price elasticity of demand is also estimated to be -2.04; therefore, the reduction in ground beef purchases as a result of recall is comparable to almost 8.3% increase in the price of this product. Using the synthetic control method that allows us to use all of the control states to produce synthetic Utah, we found the effect of this event very small.

Suggested Citation

  • Zare, Samane & Zheng, Yuqing & Buck, Steven, 2017. "Examining the Effect of Food Recalls on Demand: The Case of Ground Beef in the U.S," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252837, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea17:252837
    DOI: 10.22004/ag.econ.252837
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/252837/files/recall_final_paper_SAEA_2017.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.252837?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
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Michael R. Thomsen & Rimma Shiptsova & Sandra J. Hamm, 2006. "Sales Responses to Recalls for Listeria monocytogenes: Evidence from Branded Ready-to-Eat Meats," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(4), pages 482-493.
    2. Michael R. Thomsen & Rimma Shiptsova & Sandra J. Hamm, 2006. "Sales Responses to Recalls for Listeria monocytogenes: Evidence from Branded Ready-to-Eat Meats," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(4), pages 482-493.
    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. Bakhtavoryan, Rafael & Capps, Oral, Jr. & 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, Southern Agricultural Economics Association, vol. 46(4), pages 1-14, November.
    5. Reilly, Robert J & Hoffer, George E, 1983. "Will Retarding the Information Flow on Automobile Recalls Affect Consumer Demand?," Economic Inquiry, Western Economic Association International, vol. 21(3), pages 444-447, July.
    6. McKenzie, Andrew M. & Thomsen, Michael R., 2001. "The Effect Of E. Coli O157:H7 On Beef Prices," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(2), pages 1-14, December.
    7. Arnade, Carlos Anthony & Calvin, Linda & Kuchler, Fred, 2008. "Market Response to a Food Safety Shock: The 2006 Foodborne Illness Outbreak of E. coli O157:H7 Linked to Spinach," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6448, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Seth Freedman & Melissa Kearney & Mara Lederman, 2012. "Product Recalls, Imperfect Information, and Spillover Effects: Lessons from the Consumer Response to the 2007 Toy Recalls," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 499-516, May.
    9. Crowley, Christian S.L. & Shimazaki, Yoshiaki, 2005. "Measuring the Impact of a BSE Announcement on U.S. Retail Beef Sales: A Time-Series Analysis," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 23(1), pages 1-22.
    10. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
    11. Peake, Whitney O. & Detre, Joshua D. & Carlson, Clinton C., 2014. "One bad apple spoils the bunch? An exploration of broad consumption changes in response to food recalls," Food Policy, Elsevier, vol. 49(P1), pages 13-22.
    Full references (including those not matched with items on IDEAS)

    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. 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.
    3. Ollinger, Michael & Houser, Matthew, 2020. "Ground beef recalls and subsequent food safety performance," Food Policy, Elsevier, vol. 97(C).
    4. Bakhtavoryan, Rafael & Capps, Oral, Jr. & 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, Southern Agricultural Economics Association, vol. 46(4), pages 1-14, November.
    5. 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.
    6. 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.
    7. Lint Barrage & Eric Chyn & Justine Hastings, 2020. "Advertising and Environmental Stewardship: Evidence from the BP Oil Spill," American Economic Journal: Economic Policy, American Economic Association, vol. 12(1), pages 33-61, February.
    8. Bulut, Harun & Lawrence, John D., 2007. "Meat Slaughter and Processing Plants’ Traceability Levels Evidence From Iowa," 2007 Conference, April 16-17, 2007, Chicago, Illinois 37576, NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    9. 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.
    10. Hyun No Kim & Ik-Chang Choi, 2018. "The Economic Impact of Government Policy on Market Prices of Low-Fat Pork in South Korea: A Quasi-Experimental Hedonic Price Approach," Sustainability, MDPI, vol. 10(3), pages 1-16, March.
    11. Michael Ollinger & John Bovay, 2020. "Producer Response to Public Disclosure of Food‐Safety Information," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(1), pages 186-201, January.
    12. Chebolu-Subramanian, Vijaya & Gaukler, Gary M., 2015. "Product contamination in a multi-stage food supply chain," European Journal of Operational Research, Elsevier, vol. 244(1), pages 164-175.
    13. Barbos, Andrei & Hartman, John, 2023. "Reputational effects on third-party agents: A study of the market for fine and rare wines," Journal of Economic Behavior & Organization, Elsevier, vol. 208(C), pages 359-372.
    14. 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.
    15. 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.
    16. Pozo, Veronica F. & Schroeder, Ted C., 2013. "Effects of Meat Recalls on Firms' Stock Prices," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151287, Agricultural and Applied Economics Association.
    17. David C. Hall & Tracy D. Johnson-Hall, 2017. "Learning from Conformance Quality Failures That Triggered Product Recalls: The Role of Direct and Indirect Experience," Journal of Supply Chain Management, Institute for Supply Management, vol. 53(4), pages 13-36, October.
    18. 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.
    19. Maria Aguiar Fontes & Eric Giraud-Héraud & Alexandra Seabra Pinto, 2013. "Consumers' behaviour towards food safety: A litterature review," Working Papers hal-00912476, HAL.
    20. Elena Fagotto, 2014. "Private roles in food safety provision: the law and economics of private food safety," European Journal of Law and Economics, Springer, vol. 37(1), pages 83-109, February.

    More about this item

    Keywords

    Agricultural and Food Policy; Consumer/Household Economics; Health Economics and Policy; Marketing;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ags:saea17:252837. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/saeaaea.html .

    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.