The Market Effect of a Food Scare: The Case of Genetically Modified StarLink Corn

Colin Carter and Aaron Smith

No 11997, Working Papers from University of California, Davis, Department of Agricultural and Resource Economics

Abstract: Genetic modification of crops has revolutionized food production, but it remains controversial due to food safety concerns. A recent food safety scare provides a natural experiment on the market's willingness to accept an increase in perceived risk from genetically modified (GM) food. We analyze the market impact of contamination of the U.S. food-corn supply by a GM variety called StarLink. We find that the contamination led to a 6.8 percent discount in corn prices and that the suppression of prices lasted for at least a year.

Keywords: Food Consumption/Nutrition/Food Safety; Marketing (search for similar items in EconPapers)
Pages: 37
Date: 2004
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:ucdavw:11997

DOI: 10.22004/ag.econ.11997

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