This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Consumer and Market Responses to Mad-Cow Disease

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Wolfram Schlenker (Columbia University)
Sofia Villas-Boas (University of California, Berkeley)

Additional information is available for the following registered author(s):

Abstract

We examine how consumers and financial markets in the United States react to two health warnings about mad cow disease: the first discovery of an infected cow in December 2003 and an Oprah Winfrey show on the potentially harmful effects that aired seven years earlier. Using a unique product-level scanner data set of a national grocery chain, we find a pronounced and significant reduction in beef sales following the first discovered infection, which dissipates slowly over the next three months. Cattle futures show a comparable pattern of abnormal price drops to the scanner data. Contracts with longer maturity show smaller drops, suggesting that the market anticipated the impact to be transitory. Cattle futures show abnormal price drops after the Oprah Winfrey show that are more than 50% of the drop following the 2003 discovery of an infected cow.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1124&context=are_ucb
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Department of Agricultural & Resource Economics, UC Berkeley in its series Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series with number 1023.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: 17 Jun 2008
Date of revision:
Handle: RePEc:cdl:agrebk:1023

Note: oai:cdlib1:are_ucb-1124
Contact details of provider:
Postal: 207 Giannini Hall #3310, Berkeley, CA 94720-3310
Phone: (510) 642-3345
Fax: (510) 643-8911
Email:
Web page: http://repositories.cdlib.org/are_ucb/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords: Food safety; mad cow disease; consumer behavior; scanner data; futures prices;

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Randal R. Rucker & Walter N. Thurman & Jonathan K. Yoder, 2005. "Estimating the Structure of Market Reaction to News: Information Events and Lumber Futures Prices," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 87(2), pages 482-500, 05. [Downloadable!] (restricted)
  2. Stefano DellaVigna & Ethan Kaplan, 2007. "The Fox News Effect: Media Bias and Voting," The Quarterly Journal of Economics, MIT Press, vol. 122(3), pages 1187-1234, 08. [Downloadable!] (restricted)
  3. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Matthew Gentzkow & Jesse M. Shapiro, 2006. "What Drives Media Slant? Evidence from U.S. Daily Newspapers," NBER Working Papers 12707, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Borenstein, Severin & Zimmerman, Martin B, 1988. "Market Incentives for Safe Commercial Airline Operation," American Economic Review, American Economic Association, vol. 78(5), pages 913-35, December. [Downloadable!] (restricted)
  6. Schroeder, Ted C. & Lusk, Jayson L., 2002. "Effects of Meat Recalls on Futures Market Prices," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 31(1), April. [Downloadable!]
    Other versions:
  7. Broder, Ivy E, 1990. " The Cost of Accidental Death: A Capital Market Approach," Journal of Risk and Uncertainty, Springer, vol. 3(1), pages 51-63, March.
  8. Rausser, Gordon C & Walraven, Nicholas A, 1990. "Linkages among Commodity Futures Markets and Dynamic Welfare Analysis," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 631-39, November. [Downloadable!] (restricted)
  9. Moschini, Giancarlo & Meilke, K.D., 2004. "Modeling the Pattern of Structural Change in U.S. Meat Demand," Staff General Research Papers 11266, Iowa State University, Department of Economics.
  10. Dimson, Elroy & Marsh, Paul, 1986. "Event study methodologies and the size effect : The case of UK press recommendations," Journal of Financial Economics, Elsevier, vol. 17(1), pages 113-142, September. [Downloadable!] (restricted)
  11. Shimshack, Jay P. & Ward, Michael B. & Beatty, Timothy K.M., 2007. "Mercury advisories: Information, education, and fish consumption," Journal of Environmental Economics and Management, Elsevier, vol. 53(2), pages 158-179, March. [Downloadable!] (restricted)
  12. Maloney, Michael T & McCormick, Robert E, 1982. "A Positive Theory of Environmental Quality Regulation," Journal of Law & Economics, University of Chicago Press, vol. 25(1), pages 99-123, April.
  13. Foster, William & Just, Richard E., 1989. "Measuring welfare effects of product contamination with consumer uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 17(3), pages 266-283, November. [Downloadable!] (restricted)
  14. Chalk, Andrew J, 1987. "Market Forces and Commercial Aircraft Safety," Journal of Industrial Economics, Blackwell Publishing, vol. 36(1), pages 61-81, September. [Downloadable!] (restricted)
  15. Burton, Michael & Dorsett, Richard & Young, Trevor, 1996. "Changing Preferences for Meat: Evidence from UK Household Data, 1973-93," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 23(3), pages 357-70.
  16. Burton, Michael & Young, Trevor, 1996. "The Impact of BSE on the Demand for Beef and Other Meats in Great Britain," Applied Economics, Taylor and Francis Journals, vol. 28(6), pages 687-93, June. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hagerman, Amy & Jin, Yanhong, 2009. "The Buzz In The Pits: Livestock Futures' Response To A Rumor Of Foreign Animal Disease," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49493, Agricultural and Applied Economics Association. [Downloadable!]
  2. Park, Moonsoo & Jin, Yanhong H & Bessler, David A., 2008. "The Impacts of Animal Disease Crises on the Korean Meat Market," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6365, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
    Other versions:
Statistics
Access and download statistics

Did you know? Apart from a small start up grant in the 1990's, RePEc has received no funding and lives on the help of volunteers.

This page was last updated on 2009-11-27.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.