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Impact of Food Contamination on Brands: A Demand Systems Estimation of Peanut Butter

Author

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  • Bakhtavopryan, Rafael
  • Capps, Oral, Jr.
  • Salin, Victoria

Abstract

A 2007 foodborne illness incident involving peanut butter is linked with structural change in consumer demand. Compensated and uncompensated own- and cross-price elasticities and expenditure elasticities were calculated for leading brands before and after the product recall using the Barten synthetic model and weekly time-series data from 2006 through 2008. Statistically significant differences in price elasticities for the affected brand, Peter Pan, were absent. After a period of 27 weeks, this brand essentially recovered from the food safety crisis. Significant differences in price elasticities were evident among non-affected brands. Hence, spillover effects and heightened competition are associated with the recall.
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Suggested Citation

  • Bakhtavopryan, Rafael & Capps, Oral, Jr. & Salin, Victoria, "undated". "Impact of Food Contamination on Brands: A Demand Systems Estimation of Peanut Butter," Reports 285213, Texas A&M University, Agribusiness, Food, and Consumer Economics Research Center.
    • Handle: RePEc:ags:tamagr:285213
    DOI: 10.22004/ag.econ.285213
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    File URL: https://ageconsearch.umn.edu/record/285213/files/Impact%20of%20Food%20Contamination%20on%20Brands_A%20Demand%20Systems%20Estimation%20of%20Peanut%20Butter.pdf
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    Citations

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    Cited by:

    1. Zhou, Pei & Liu, Yizao, 2023. "Recall information heterogeneity and perceived health risk: The impact of food recall on fresh meat market in the U.S," Food Policy, Elsevier, vol. 114(C).
    2. Ollinger, Michael, 2024. "Recall characteristics and food safety process control," Food Policy, Elsevier, vol. 124(C).
    3. Bakhtavoryan, Rafael & Capps, Oral, Jr. & Salin, Victoria, 2014. "Dynamics of Consumer Response to Food Contamination: The 2007 Peanut Butter Recall," Journal of Food Distribution Research, Food Distribution Research Society, vol. 45(2), pages 1-16, July.
    4. Kuchler, Fred, "undated". "How Much Does It Matter How Sick You Get? Consumers' Responses to Foodborne Disease Outbreaks of Different Severities," Economic Research Report 262205, United States Department of Agriculture, Economic Research Service.
    5. Zare, Samane & Zheng, Yuqing & Buck, Steven, "undated". "Examining the Effect of Food Recalls on Demand: The Case of Ground Beef in the U.S," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252837, Southern Agricultural Economics Association.
    6. Bakhtavoryan, Rafael & Capps, Oral & 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, Cambridge University Press, vol. 46(4), pages 559-573, November.
    7. 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.
    8. Ollinger, Michael & Houser, Matthew, 2020. "Ground beef recalls and subsequent food safety performance," Food Policy, Elsevier, vol. 97(C).
    9. Bakhtavoryan, Rafael & Capps, Oral, Jr. & Salin, Victoria, 2016. "Times Series Analysis of the Peanut Butter Demand in Light of the Food Safety Issue," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235621, Agricultural and Applied Economics Association.
    10. Maria Kalaitzandonakes & Brenna Ellison & Maria Teresa Serra Devesa, 2025. "The financial impact of foodborne illness outbreaks at restaurants: Chipotle Mexican Grill," Agribusiness, John Wiley & Sons, Ltd., vol. 41(2), pages 381-400, April.

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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