Impact of Food Contamination on Brands: A Demand Systems Estimation of Peanut Butter

A 2007 food-borne illness incident involving peanut butter is linked with structural change in consumer demand. Compensated and uncompensated own- and cross-price elasticities and expenditure elasticities were calculated for leading brands before and after the product recall using the Barten synthetic model and weekly time-series data from 2006 through 2008. Statistically significant differences in price elasticities for the affected brand, Peter Pan, were absent. After a period of 27 weeks, this brand essentially recovered from the food safety crisis. Significant differences in price elasticities were evident among non-affected brands. Hence, spillover effects and heightened competition are associated with the recall.


Issue Date:
2012-12
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/141695
Published in:
Agricultural and Resource Economics Review, Volume 41, Number 3
Page range:
327-339
Total Pages:
13




 Record created 2017-04-01, last modified 2017-08-26

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