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Abstract

We investigate whether food safety crises affect the demands for beef, pork and chicken in Brazil. We construct series of food safety crisis indices for each meat (beef, pork and chicken) based on the total number of news in ‘Folha de São Paulo’ newspaper fitting predefined search criteria. We use those series, the retail prices of each type of meat, the price of a composite good and per capita expenditure on consumption as explanatory variables in six specifications of a four-equation demand system. We select the preferred specification of the models based on adjusted likelihood ratio tests. Based on the preferred model specification we do not reject the hypothesis by which food safety crisis do not affect the demand for meat in Brazil. We conclude that if the shifts down in the demand in response to food safety crises create incentives for companies to adopt measures to produce safer food, such incentives do not exist in the meat sector in Brazil. This reinforces the importance and necessity of an active public system to regulate and establish standards for meat safety in Brazil.

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