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Bovine spongiform encephalopathy and generic promotion of beef: An analysis for “quality from Bavaria”

Author

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  • Roland Herrmann

    (Institute for Agricultural Policy and Market Research,, University of Giessen, Senckenbergstrasse 3,, 35390 Giessen, Germany., E-mail: Roland.Herrmann@agrar.uni-giessen.de)

  • Stanley R. Thompson

    (Department of Agricultural, Environmental and Development Economics,, The Ohio State University Columbus, OH 43210., E-mail: Thompson.51@osu.edu)

  • Stephanie Krischik-Bautz

    (Institute for Agricultural Policy and Market Research, University of Giessen,, Senckenbergstrasse 3, 35390 Giessen, Germany., E-mail: Stephanie.Krischik-Bautz@agrar.uni-giessen.de)

Abstract

In this article we examine the impact of generic promotion on Bavarian beef demand during a period of a serious health concern in Europe: the bovine spongiform encephalopathy (BSE) crisis. We investigate the potential off-setting effects of advertising and promotion (positive) and heightened food safety awareness (negative). Empirically, we evaluate the economic effectiveness of a program that promoted Bavarian beef as safe at the same time consumers were becoming increasingly concerned over the safety of the beef supply. Econometric estimates of both effects are provided and a model proposed to assess the corresponding economic welfare implications. The results show that the regional promotion of Bavarian beef increased demand by 4.6%. This increase was offset with a 6.9% decline in consumption due to information and public awareness of the BSE crisis. In addition, secular declines in consumption due to preference changes away from beef amounted to 15.2%. The welfare effects of the Bavarian government-financed program were positive for both producers and consumers. Private and social benefit cost ratios suggest that the aggregate welfare gains due to promotion more than compensated for the cost of the program. [Econ-Lit citations: Q13, M37] © 2002 Wiley Periodicals, Inc.

Suggested Citation

  • Roland Herrmann & Stanley R. Thompson & Stephanie Krischik-Bautz, 2002. "Bovine spongiform encephalopathy and generic promotion of beef: An analysis for “quality from Bavaria”," Agribusiness, John Wiley & Sons, Ltd., vol. 18(3), pages 369-385.
    • Handle: RePEc:wly:agribz:v:18:y:2002:i:3:p:369-385
    DOI: 10.1002/agr.10022
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    References listed on IDEAS

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    Cited by:

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    2. Heiman, Amir & Lowengart, Oded, 2006. "An Ostrich Or A Leopard - Communication Response Strategies To Post-Exposure On Negative Information About Health Hazards In Foods," Discussion Papers 7172, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    3. Edgardo Ayala & Joana Chapa, 2017. "AH1N1 impact on the Mexican pork meat market," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 32(1), pages 3-25.
    4. Ramo Barrena & Mercedes Sánchez, 2010. "Differences in Consumer Abstraction Levels as a Function of Risk Perception," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(1), pages 34-59, February.
    5. Devadoss, Stephen & Holland, David W. & Stodick, Leroy & Ghosh, Joydeep, 2006. "A General Equilibrium Analysis of Foreign and Domestic Demand Shocks Arising from Mad Cow Disease in the United States," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 31(2), pages 1-13, August.
    6. Sven Anders, 2008. "Imperfect Competition in German Food Retailing: Evidence from State Level Data," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 36(4), pages 441-454, December.

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