Year: 2008
Type: preprint
Abstract: Consumer concerns regarding food safety can have substantial impacts on their consumption patterns. Thus, understanding consumer response to food safety information is important for quantifying consumer response to food safety events, predicting market impacts, and developing appropriate risk communication strategies. Flexible demand systems have gained much popularity in analyzing effects of food safety outbreaks on consumer demand because of their ability to capture interactions between the demand for substitutable and complementary goods. Using Italian scanner data on meat sales, we show the economic importance of accounting for the impact of avian flu outbreaks on group expenditures for meats in a dynamic Almost Ideal Demand System (AIDS) specification with intertemporally optimizing consumers. Failure to account for this form of expenditure endogeneity results in a substantial understatement of the food safety effect.
Authors: Beach, Robert H., Zhen, Chen
Institution: RTI International
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2101826377