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Consumer Response to a Food Safety Shock: The 2006 Food-Borne Illness Outbreak of E. coli O157: H7 Linked to Spinach

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  • Carlos Arnade
  • Linda Calvin
  • Fred Kuchler

Abstract

A retail demand model measured the impact of the Food and Drug Administration's 2006 announcement warning consumers about E. coli O157: H7 contamination in spinach. Model results indicated that bulk lettuces were shock substitutes (in contrast to price substitutes) as consumers purchased fewer spinach products and more bulk lettuce of all types. Results also showed that consumers initially moved away from bagged salads without spinach; but consumer confidence rebounded quickly and expenditures rose. Over a period of sixty-eight weeks, retail expenditures decreased 20% for bagged spinach and 1% for bulk spinach. Retail expenditures for all leafy greens declined just 1%. Copyright 2009 Agricultural and Applied Economics Association

Suggested Citation

  • Carlos Arnade & Linda Calvin & Fred Kuchler, 2009. "Consumer Response to a Food Safety Shock: The 2006 Food-Borne Illness Outbreak of E. coli O157: H7 Linked to Spinach," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(4), pages 734-750, December.
  • Handle: RePEc:oup:revage:v:31:y:2009:i:4:p:734-750
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    References listed on IDEAS

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    1. 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(2), pages 1-23, December.
    2. Beach, Robert H. & Kuchler, Fred & Leibtag, Ephraim S. & Zhen, Chen, 2008. "The Effects of Avian Influenza News on Consumer Purchasing Behavior: A Case Study of Italian Consumers' Retail Purchases," Economic Research Report 56477, United States Department of Agriculture, Economic Research Service.
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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. 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.

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