IDEAS home Printed from https://ideas.repec.org/p/ags/aaea08/6448.html
   My bibliography  Save this paper

Market Response to a Food Safety Shock: The 2006 Foodborne Illness Outbreak of E. coli O157:H7 Linked to Spinach

Author

Listed:
  • Arnade, Carlos Anthony
  • Calvin, Linda
  • Kuchler, Fred

Abstract

In 2006 FDA announced that consumers should not eat fresh spinach in the wake of a large foodborne illness outbreak of E. coli O157:H7. This paper investigates response of consumers to the announcement. We use an AIDS demand model with 5 food safety shock variables and retail scanner data to analyze market response. Even fifteen months after the outbreak, predicted sales of spinach in bags were still down 10 percent from what they would have been in the absense of the food safety shock. After the outbreak, consumers shifted to other leafy greens such as bulk iceberg lettuce, other bulk lettuce, and bagged salads without spinach.

Suggested Citation

  • 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).
  • Handle: RePEc:ags:aaea08:6448
    DOI: 10.22004/ag.econ.6448
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/6448/files/467354.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.6448?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
    ---><---

    References listed on IDEAS

    as
    1. Kuchler, Fred & Tegene, Abebayehu, 2006. "Did Bse Announcements Reduce Beef Purchases?," Economic Research Report 7251, United States Department of Agriculture, Economic Research Service.
    2. Carlos Arnade & Daniel Pick, 1998. "Seasonality and unit roots: the demand for fruits," Agricultural Economics, International Association of Agricultural Economists, vol. 18(1), pages 53-62, January.
    3. 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.
    4. Calvin, Linda, 2007. "Outbreak Linked to Spinach Forces Reassessment of Food Safety Practices," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, pages 1-8, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:oup:apecpp:v:40:y:2018:i:3:p:402-420. is not listed on IDEAS
    2. Tselepidakis, Elina, 2015. "Food Safety and the Demand for Leafy Greens," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205583, Agricultural and Applied Economics Association.
    3. Ferrier, P. & Zhen, C. & Bovay, J., 2018. "Price and Welfare Effects of the Food Safety Modernization Act Produce Safety Rule," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277492, International Association of Agricultural Economists.
    4. Chantal Toledo & Sofia Berto Villas-Boas, 2019. "Safe or Not? Consumer Responses to Recalls with Traceability," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 41(3), pages 519-541.
    5. Yuqing Zheng & Chen Zhen & Daniel Dench & James M. Nonnemaker, 2017. "U.S. Demand for Tobacco Products in a System Framework," Health Economics, John Wiley & Sons, Ltd., vol. 26(8), pages 1067-1086, August.
    6. 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.
    7. 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.
    8. Pouliot, Sebastien, 2011. "The FDA Food Safety and Modernization Act and the Exemption for Small Firms," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103885, Agricultural and Applied Economics Association.
    9. Oh, Miyoung & Hennessy, David A., 2014. "Upstream and Downstream Strategic Food Safety Interactions," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 174105, Agricultural and Applied Economics Association.
    10. Bitsch, Vera & Koković, Nevena & Rombach, Meike, 2014. "Risk Communication and Market Effects during Foodborne Illnesses: A Comparative Case Study of Bacterial Outbreaks in the U.S. and in Germany," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 17(3), pages 1-18, September.
    11. Bovay, John & Ferrier, Peyton & Zhen, Chen, 2018. "Estimated Costs for Fruit and Vegetable Producers To Comply With the Food Safety Modernization Act’s Produce Rule," Economic Information Bulletin 276220, United States Department of Agriculture, Economic Research Service.
    12. Rejesus, Roderick M. & Safley, Charles D. & Strik, Bernadine C, 2014. "Demand and Welfare Impacts of a Potential Food Safety Event in the Blackberry Industry," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169452, Agricultural and Applied Economics Association.
    13. Maria Aguiar Fontes & Eric Giraud-Héraud & Alexandra Seabra Pinto, 2013. "Consumers' behaviour towards food safety: A litterature review," Working Papers hal-00912476, HAL.
    14. Zarebanadkoki, Samane & Zheng, Yuqing & Woods, Timothy & Buck, Steven, 2016. "Examining the Effect of Food Recalls on Demand: The Case of Ground Beef in the U.S," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236112, Agricultural and Applied Economics Association.
    15. Holderieath, Jason, 2016. "Spatiotemporal management under heterogeneous damage and uncertain parameters. An agent-based approach," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235850, Agricultural and Applied Economics Association.
    16. Rudi, Jeta & Çakir, Metin, 2015. "Demand Spillovers of Food Recalls in Differentiated Product Markets," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205313, Agricultural and Applied Economics Association.
    17. Adalja, Aaron & Lichtenberg, Erik, 2016. "Foodborne Illness Outbreaks, Collective Reputation, and Voluntary Adoption of Industry-wide Food Safety Protocols by Fruit and Vegetable Growers," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235865, Agricultural and Applied Economics Association.

    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. Bitsch, Vera & Koković, Nevena & Rombach, Meike, 2014. "Risk Communication and Market Effects during Foodborne Illnesses: A Comparative Case Study of Bacterial Outbreaks in the U.S. and in Germany," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 17(3), pages 1-18, September.
    2. Ji, Wen, 2000. "Changing Seasonal Patterns In The Poultry Market," 2000 Annual meeting, July 30-August 2, Tampa, FL 21860, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. D. Evans & E. Kula & H. Sezer, 2005. "Regional welfare weights for the UK: England, Scotland, Wales and Northern Ireland," Regional Studies, Taylor & Francis Journals, vol. 39(7), pages 923-937.
    4. Padilla, Luis & Acharya, Ram N., 2000. "Effects Of Health Information On Fruit And Vegetable Consumption," 2000 Annual meeting, July 30-August 2, Tampa, FL 21742, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Arnade, Carlos & Kuchler, Fred & Calvin, Linda, 2011. "Food Safety and Spinach Demand: A Generalized Error Correction Model," Agricultural and Resource Economics Review, Cambridge University Press, vol. 40(2), pages 251-265, September.
    6. Shimshack, Jay P. & Ward, Michael B., 2010. "Mercury advisories and household health trade-offs," Journal of Health Economics, Elsevier, vol. 29(5), pages 674-685, September.
    7. Elodie Rouviere & Raphael Soubeyran, 2011. "Competition vs. quality in an industry with imperfect traceability," Economics Bulletin, AccessEcon, vol. 31(4), pages 3052-3067.
    8. Woods, Mollie & Thornsbury, Suzanne & Raper, Kellie Curry & Weldon, Richard N. & Wysocki, Allen F., 2003. "Food Safety And Fresh Strawberry Markets," Staff Paper Series 11712, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    9. Raper, Kellie Curry & Thornsbury, Suzanne & Aguilar, Cristobal, 2009. "Regional Wholesale Price Relationships in the Presence of Counter-Seasonal Imports," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 41(1), pages 271-290, April.
    10. Malaga, Jaime E. & Williams, Gary W., 2006. "Mexican Agricultural and Food Export Competitiveness," Reports 90778, Texas A&M University, Agribusiness, Food, and Consumer Economics Research Center.
    11. Mathews, Kenneth H., Jr. & Arnade, Carlos Anthony & Jones, Keithly G., 2008. "Derived Demand for Cattle Feeding Inputs," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 26(1), pages 1-20.
    12. Yadavalli, Anita & Jones, Keithly, 2014. "Does media influence consumer demand? The case of lean finely textured beef in the United States," Food Policy, Elsevier, vol. 49(P1), pages 219-227.
    13. Falsafian, Azadeh, 2016. "Seasonality and Forecasting of Monthly Broiler Price in Iran," International Journal of Agricultural Management and Development (IJAMAD), Iranian Association of Agricultural Economics, vol. 6(2), June.
    14. Thomsen, Michael R. & Shiptsova, Rimma & Hamm, Sandra J., 2004. "Sales Responses To Recalls For Listeria Monocytogenes: Evidence From Branded Ready-To-Eat Meats," 2004 Annual Meeting, February 14-18, 2004, Tulsa, Oklahoma 34602, Southern Agricultural Economics Association.
    15. Patrick Baur, 2020. "When farmers are pulled in too many directions: comparing institutional drivers of food safety and environmental sustainability in California agriculture," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 37(4), pages 1175-1194, December.
    16. Pouliot, Sebastien, 2012. "Consumer confidence in Food Safety and the 2010 egg recall," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124769, Agricultural and Applied Economics Association.
    17. Nzaku, Kilungu & Houston, Jack E. & Fonsah, Esendugue Greg, 2012. "A Dynamic Application of the AIDS Model to Import Demand for Tropical Fresh Fruits in the USA," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126721, International Association of Agricultural Economists.
    18. Carpio, Carlos E. & Wohlgenant, Michael K., 2006. "A Structural Econometric Model of Consumer Demand at Pick-Your-Own Fruit Operations," 2006 Annual meeting, July 23-26, Long Beach, CA 21372, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. Baldwin, Katherine L. & Jones, Keithly G., 2012. "U.S. Citrus Import Demand: Seasonality and Substitution," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119741, Southern Agricultural Economics Association.
    20. Cameron MacKenzie & Hiba Baroud & Kash Barker, 2016. "Static and dynamic resource allocation models for recovery of interdependent systems: application to the Deepwater Horizon oil spill," Annals of Operations Research, Springer, vol. 236(1), pages 103-129, January.

    More about this item

    Keywords

    Food Consumption/Nutrition/Food Safety;

    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:aaea08:6448. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    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/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.