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Valuing food-borne risks using time-series data: The case of E. coli O157:H7 and BSE crises in Japan

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  • Shunji Oniki

    (Japan International Research Center for Agricultural Sciences, 1-1 Ohwashi, Tsukuba 305-8686, Japan)

Abstract

This study evaluates changes in consumers' concerns on food safety after the outbreaks of E. coli O157 and bovine spongiform encephalopathy (BSE) in Japan using household consumption time-series data. A food demand system for Japanese households is estimated using the linear approximate almost-ideal demand system (AIDS) model to evaluate the willingness to accept (WTA) compensation for risk. The Kalman filtering method is applied to produce estimates without a priori assumption regarding timing of the changes. The WTA value rises immediately after a food safety crisis occurs and declines in a short time. However, it does not return to previous levels for an extended period. A possible explanation for remaining effects of a crisis might be that they are the results of habit formation and learning effects of consumption. [EconLit citations: D12, D18, Q13]. © 2006 Wiley Periodicals, Inc. Agribusiness 22: 219-232, 2006.

Suggested Citation

  • Shunji Oniki, 2006. "Valuing food-borne risks using time-series data: The case of E. coli O157:H7 and BSE crises in Japan," Agribusiness, John Wiley & Sons, Ltd., vol. 22(2), pages 219-232.
    • Handle: RePEc:wly:agribz:v:22:y:2006:i:2:p:219-232
    DOI: 10.1002/agr.20081
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    References listed on IDEAS

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    1. Mark E. Smith & Eileen O. van Ravenswaay & Stanley R. Thompson, 1988. "Sales Loss Determination in Food Contamination Incidents: An Application to Milk Bans in Hawaii," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(3), pages 513-520.
    2. Pollak, Robert A, 1970. "Habit Formation and Dynamic Demand Functions," Journal of Political Economy, University of Chicago Press, vol. 78(4), pages 745-763, Part I Ju.
    3. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
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    Cited by:

    1. Yamane, Fumihiro, 2010. "Estimation of Consumer Welfare Change from the Revision of Age Criterion for BSE Testing: Hypothetical Revealed Preference Method Using Monitoring Survey Data," Japanese Journal of Agricultural Economics (formerly Japanese Journal of Rural Economics), Agricultural Economics Society of Japan (AESJ), vol. 12, pages 1-19.

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