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Sales Loss Determination in Food Contamination Incidents: An Application to Milk Bans in Hawaii

Author

Listed:
  • Smith, Mark E.
  • van Ravenswaay, Eileen O.
  • Thompson, Stanley R.

Abstract

This article presents a procedure for estimating sales loss following a food contamination incident with application to the case of heptachlor contamination of fresh fluid milk in Oahu, Hawaii in 1982. A major finding is that media coverage following the incident had a significant impact on milk purchases and that negative coverage had a larger effect than positive coverage. This conclusion implies that public statements by producers or government to assure the public of safe food supplies may be ineffective in restoring consumer confidence following the discovery of a food safety problem. American Journal of Agricultural Economics, August, 1988.

Suggested Citation

  • Smith, Mark E. & van Ravenswaay, Eileen O. & Thompson, Stanley R., 1987. "Sales Loss Determination in Food Contamination Incidents: An Application to Milk Bans in Hawaii," Working Papers 115803, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
    • Handle: RePEc:ags:rpspwp:115803
    DOI: 10.22004/ag.econ.115803
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    File URL: https://ageconsearch.umn.edu/record/115803/files/WP-5.pdf
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    1. Hamilton, James L, 1972. "The Demand for Cigarettes: Advertising, the Health Scare, and the Cigarette Advertising Ban," The Review of Economics and Statistics, MIT Press, vol. 54(4), pages 401-411, November.
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    3. David G. Swartz & Ivar E. Strand, Jr., 1981. "Avoidance Costs Associated with Imperfect Information: The Case of Kepone," Land Economics, University of Wisconsin Press, vol. 57(2), pages 139-150.
    4. James G. MacKinnon, 1983. "Model Specification Tests Against Non-Nested Alternatives," Working Paper 573, Economics Department, Queen's University.
    5. Robert N. Shulstad & Herbert H. Stoevener, 1978. "The Effects of Mercury Contamination in Pheasants on the Value of Pheasant Hunting in Oregon," Land Economics, University of Wisconsin Press, vol. 54(1), pages 39-49.
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