Estimating the Consumer Expenditure under COOL

Osei Yeboah, Cephas Naanwaab and Johnson Antwi

No 196851, 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia from Southern Agricultural Economics Association

Abstract: Country of Origin Labeling (COOL) is a labeling procedure, passed in the 2008 Farm Bill by the United States Congress requiring all food products to be labeled by their country of origin. According to Brester et al. (2005), COOL will generate an additional cost of 1.24% and 3.41% for US beef and pork consumers, respectively, which will affect their expenditure patterns. This paper seeks to analyze the effect of COOL induced expenditures on US beef and pork products. A system of linear expenditure functions are developed and used to estimate the own price and cross price elasticities as well as the income elasticities. Consumer expenditure (retail quantities and prices) on each product is regressed on per capita GDP and consumer expenditure on a related product such as chicken using quarterly data from 2004 to 2008 to represent pre COOL; and 2009 to 2013 constituting post COOL. The” pre’’ and “post” COOL estimated elasticities are compared. The estimated coefficients were all statistically significant both before and after the implementation of COOL. Generally, consumer expenditure on beef and pork after the implementation of COOL decreased while the consumer expenditure on chicken increased.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Pages: 24
Date: 2015
New Economics Papers: this item is included in nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:saea15:196851

DOI: 10.22004/ag.econ.196851

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