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Long-Run Effects From Consumer Reaction To The Spread Of Foodborne Pathogens: The Case Of E. Coli Contamination Of Beef At Jack In The Box Restaurants

  • Zhen, Chen
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    Using news coverage of food safety as an indicator of public attention to food pathogen issues in meat products, we found the 1993 E. coli O157:H7 contamination of hamburgers likely permanently changed consumers' perception of beef safety. A food consumption model with rational habit persistence is developed to examine whether consumers make forward-looking consumption decisions accounting for expectations of future food safety. We document clear evidence of forward-looking consumption behavior, which suggests that government regulations implemented subsequent to the 1993 event to protect consumers from ignorance or cognitive defects may be ineffective.

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    File URL: http://purl.umn.edu/51341
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    Paper provided by International Association of Agricultural Economists in its series 2009 Conference, August 16-22, 2009, Beijing, China with number 51341.

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    Date of creation: 2009
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    Handle: RePEc:ags:iaae09:51341
    Contact details of provider: Web page: http://www.iaae-agecon.org/
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    1. Schlenker, Wolfram & Villas-Boas, Sofia B, 2008. "Consumer and market responses to mad-cow disease," CUDARE Working Paper Series 1023, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
    2. Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
    3. Anderson, Gary & Moore, George, 1985. "A linear algebraic procedure for solving linear perfect foresight models," Economics Letters, Elsevier, vol. 17(3), pages 247-252.
    4. Paolo Zagaglia, 2005. "Solving Rational-Expectations Models through the Anderson-Moore Algorithm: An Introduction to the Matlab Implementation," Computational Economics, Society for Computational Economics, vol. 26(1), pages 91-106, August.
    5. Carter, Colin A. & Smith, Aaron D., 2004. "The Market Effect of a Food Scare: The Case of Genetically Modified StarLink Corn," Working Papers 11997, University of California, Davis, Department of Agricultural and Resource Economics.
    6. Starke, Yolanda & Ralston, Katherine L. & Brent, C. Philip & Riggins, Toija & Lin, Chung-Tung Jordan, 2002. "Consumer Food Safety Behavior: A Case Study In Hamburger Cooking And Ordering," Agricultural Economics Reports 34061, United States Department of Agriculture, Economic Research Service.
    7. Nicholas E. Piggott & Thomas L. Marsh, 2004. "Does Food Safety Information Impact U.S. Meat Demand?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 154-174.
    8. Hall, Alastair R., 2004. "Generalized Method of Moments," OUP Catalogue, Oxford University Press, number 9780198775201, March.
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