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Changes in U.S. consumer response to food safety recalls in the shadow of a BSE scare

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  • Taylor, Mykel
  • Klaiber, H. Allen
  • Kuchler, Fred

Abstract

In December 2003, Bovine Spongiform Encephalopathy (BSE) was discovered in the United States. This food safety event received extensive media coverage and prompted changes in regulatory controls. Using a panel selection model, we show that prior to December 2003, ground beef recalls had no impact on household purchases of ground beef, even for households that were located in the recall-defined geographic areas. However, we find robust evidence that the 2003 BSE event caused a change in the way people view and respond to recalls of ground beef, a change that persisted for at least two years following the BSE event. The average impact of a ground beef recall in the post-BSE period is a 0.26lb per person reduction in retail purchases of ground beef. A decline in purchases of this magnitude would result in over $97million in losses to the beef industry in a two week period following a nationwide recall. This dwarfs the economic impacts of directly removing recalled beef from supply chains and provides FSIS increased regulatory power due to higher overall industry costs associated with food safety violations.

Suggested Citation

  • Taylor, Mykel & Klaiber, H. Allen & Kuchler, Fred, 2016. "Changes in U.S. consumer response to food safety recalls in the shadow of a BSE scare," Food Policy, Elsevier, vol. 62(C), pages 56-64.
  • Handle: RePEc:eee:jfpoli:v:62:y:2016:i:c:p:56-64
    DOI: 10.1016/j.foodpol.2016.04.005
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Rahbauer, S. & Staudigel, M. & Roosen, J., 2018. "Investigating German meat demand for consumer groups with different attitudes and sociodemographic characteristics," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277058, International Association of Agricultural Economists.
    3. Liwen Ling & Dabin Zhang & Shanying Chen & Amin W. Mugera, 2020. "Can online search data improve the forecast accuracy of pork price in China?," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 39(4), pages 671-686, July.
    4. Matthew Houser & Berna Karali, 2020. "How Scary Are Food Scares? Evidence from Animal Disease Outbreaks," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(2), pages 283-306, June.
    5. Chen, You-hua & Huang, Sun-jun & Mishra, Ashok K. & Wang, X. Henry, 2018. "Effects of input capacity constraints on food quality and regulation mechanism design for food safety management," Ecological Modelling, Elsevier, vol. 385(C), pages 89-95.
    6. A. Amarender Reddy & Sandra Ricart & Timothy Cadman, 0. "Driving factors of food safety standards in India: learning from street-food vendors’ behaviour and attitude," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 0, pages 1-17.
    7. Ki-Hueng Kim & Kwan-Ryul Lee, 2019. "What Are South Korean Consumers’ Concerns When Buying Eco-Friendly Agricultural Products?," Sustainability, MDPI, Open Access Journal, vol. 11(17), pages 1-13, August.

    More about this item

    Keywords

    Consumer demand; Regulatory power; Food safety; Ground beef; Recall;

    JEL classification:

    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • D1 - Microeconomics - - Household Behavior

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