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Consumer Response to a Food Safety Shock: The 2006 Food-Borne Illness Outbreak of E. coli O157: H7 Linked to Spinach

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  • Carlos Arnade
  • Linda Calvin
  • Fred Kuchler

Abstract

A retail demand model measured the impact of the Food and Drug Administration’s 2006 announcement warning consumers about E. coli O157: H7 contamination in spinach. Model results indicated that bulk lettuces were shock substitutes (in contrast to price substitutes) as consumers purchased fewer spinach products and more bulk lettuce of all types. Results also showed that consumers initially moved away from bagged salads without spinach; but consumer confidence rebounded quickly and expenditures rose. Over a period of sixty-eight weeks, retail expenditures decreased 20% for bagged spinach and 1% for bulk spinach. Retail expenditures for all leafy greens declined just 1%.

Suggested Citation

  • Carlos Arnade & Linda Calvin & Fred Kuchler, 2009. "Consumer Response to a Food Safety Shock: The 2006 Food-Borne Illness Outbreak of E. coli O157: H7 Linked to Spinach," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(4), pages 734-750.
    • Handle: RePEc:oup:revage:v:31:y:2009:i:4:p:734-750.
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    File URL: http://hdl.handle.net/10.1111/j.1467-9353.2009.01464.x
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    2. Chantal Toledo & Sofia Berto Villas-Boas, 2019. "Safe or Not? Consumer Responses to Recalls with Traceability," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(3), pages 519-541, September.
    3. Hoffmann, Sandra & Ashton, Lydia & Todd, Jessica E. & Ahn, Jae-wan & Berck, Peter, 2021. "Attributing U.S. Campylobacteriosis Cases to Food Sources, Season, and Temperature," USDA Miscellaneous 309620, United States Department of Agriculture.
    4. Rejesus, Roderick M. & Safley, Charles D. & Strik, Bernadine C, 2014. "Demand and Welfare Impacts of a Potential Food Safety Event in the Blackberry Industry," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169452, Agricultural and Applied Economics Association.
    5. Bovay, John & Ferrier, Peyton & Zhen, Chen, 2018. "Estimated Costs for Fruit and Vegetable Producers To Comply With the Food Safety Modernization Act’s Produce Rule," Economic Information Bulletin 276220, United States Department of Agriculture, Economic Research Service.
    6. Li, Tongzhe & Bernard, John C. & Johnston, Zachary A. & Messer, Kent D. & Kaiser, Harry M., 2017. "Consumer preferences before and after a food safety scare: An experimental analysis of the 2010 egg recall," Food Policy, Elsevier, vol. 66(C), pages 25-34.
    7. Kelsey D. Meagher, 2022. "Policy responses to foodborne disease outbreaks in the United States and Germany," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 39(1), pages 233-248, March.
    8. Gülbanu Kaptan & Arnout R.H. Fischer & Lynn J. Frewer, 2018. "Extrapolating understanding of food risk perceptions to emerging food safety cases," Journal of Risk Research, Taylor & Francis Journals, vol. 21(8), pages 996-1018, August.
    9. repec:oup:apecpp:v:40:y:2018:i:3:p:402-420. is not listed on IDEAS
    10. Horeh, Marziyeh Bahalou & Elbakidze, Levan, 2022. "Produce Tracing from Farm to Wholesale and Food Safety in the U.S," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322357, Agricultural and Applied Economics Association.
    11. Zhou, Jiehong & Zhang, Jing & Zhoui, Li, 2022. "Information interventions and health promotion behavior: evidence from China after cadmium rice events," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 25(4), September.
    12. Alba J. Collart & Elizabeth Canales, 2022. "How might broad adoption of blockchain‐based traceability impact the U.S. fresh produce supply chain?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(1), pages 219-236, March.
    13. Holderieath, Jason, 2016. "Spatiotemporal management under heterogeneous damage and uncertain parameters. An agent-based approach," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235850, Agricultural and Applied Economics Association.
    14. Rudi, Jeta & Çakir, Metin, 2015. "Demand Spillovers of Food Recalls in Differentiated Product Markets," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205313, Agricultural and Applied Economics Association.
    15. Brandon R. McFadden & Trey Malone & Maik Kecinski & Kent D. Messer, 2021. "COVID‐19 Induced Stigma in U.S. Consumers: Evidence and Implications," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(2), pages 486-497, March.
    16. Tselepidakis, Elina, 2015. "Food Safety and the Demand for Leafy Greens," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205583, Agricultural and Applied Economics Association.
    17. Chen, Xiaohong & Zhao, Jinhua & Zhou, Li, 2024. "Knowledge protects against pollution: The health effects of the cadmium rice event in China," World Development, Elsevier, vol. 175(C).
    18. 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.
    19. Lin, Wen & Ma, Baojie & Liang, Jiangyuan & Jin, Shaosheng, 2024. "Price response to government disclosure of food safety information in developing markets," Food Policy, Elsevier, vol. 123(C).
    20. Pouliot, Sebastien, 2011. "The FDA Food Safety and Modernization Act and the Exemption for Small Firms," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103885, Agricultural and Applied Economics Association.
    21. Adalja, Aaron & Lichtenberg, Erik, 2016. "Foodborne Illness Outbreaks, Collective Reputation, and Voluntary Adoption of Industry-wide Food Safety Protocols by Fruit and Vegetable Growers," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235865, Agricultural and Applied Economics Association.
    22. Maria Aguiar Fontes & Eric Giraud-Héraud & Alexandra Seabra Pinto, 2013. "Consumers' behaviour towards food safety: A litterature review," Working Papers hal-00912476, HAL.

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