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Food Safety Information and Food Demand - Effects of Temporary and Permanent News

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  • Smed, Sinne
  • Jensen, Jorgen Dejgaard

Abstract

This paper examines the cross-impacts of food safety news concerning one product on the demand for another product, using the Danish demand for pasteurized eggs versus shell eggs as an illustrative case. The study identifies news with a temporary impact and news with a permanent impact on consumers' food demand behavior. The techniques used to identify the permanent versus temporary news are recursive estimation and parameter stability. Whereas "permanent" news is identified to be represented by a specific individual event, "temporary" news concerning salmonella in eggs is aggregated into a news-index variable. Both temporary and permanent news concerning salmonella in shell eggs appear to have significant positive impacts on the demand for pasteurized eggs. The model is estimated as an Error Correction Model. Consumers are found to adjust quite rapidly to both temporary and permanent news. Both the composition of egg consumption accounted as mean budget shares varies across socio-demographic household groups as well as the impact of the considered permanent news.

Suggested Citation

  • Smed, Sinne & Jensen, Jorgen Dejgaard, 2002. "Food Safety Information and Food Demand - Effects of Temporary and Permanent News," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24811, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae02:24811
    DOI: 10.22004/ag.econ.24811
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    File URL: https://ageconsearch.umn.edu/record/24811/files/cp02sm49.pdf
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    References listed on IDEAS

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    1. Mark E. Smith & Eileen O. van Ravenswaay & Stanley R. Thompson, 1988. "Sales Loss Determination in Food Contamination Incidents: An Application to Milk Bans in Hawaii," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(3), pages 513-520.
    2. Rickertsen, Kyrre & Chalfant, James A & Steen, Marie, 1995. "The Effects of Advertising on the Demand for Vegetables," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 22(4), pages 481-494.
    3. Deborah J. Brown & Lee F. Schrader, 1990. "Cholesterol Information and Shell Egg Consumption," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 548-555.
    4. David G. Swartz & Ivar E. Strand, Jr., 1981. "Avoidance Costs Associated with Imperfect Information: The Case of Kepone," Land Economics, University of Wisconsin Press, vol. 57(2), pages 139-150.
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    Cited by:

    1. Bakhtavoryan, Rafael & Capps, Oral, Jr. & Salin, Victoria, 2012. "Impact of Food Contamination on Brands: A Demand Systems Estimation of Peanut Butter," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 41(3), pages 1-13, December.

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