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

Carlos Arnade, Linda Calvin and Fred Kuchler

No 6448, 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

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.

Keywords: Food; Consumption/Nutrition/Food; Safety (search for similar items in EconPapers)
Pages: 30
Date: 2008
New Economics Papers: this item is included in nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea08:6448

DOI: 10.22004/ag.econ.6448

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