Food scare crises and price volatility: The case of the BSE in Spain

Recent incidents of contaminated food products coupled with the widespread diffusion of news by mass media and the growing social concerns about food safety, have resulted in significant food market crises. One of the most highly publicized recent food scares involved Bovine Spongiform Encephalopathy (BSE). In our analysis, we evaluate the impacts from a BSE outbreak on the price volatility transmission along the Spanish food marketing chain by using a smooth transition conditional correlation (STCC) GARCH model. Our work is the first to assess price volatility responses to food scares. Results suggest that two distinct regimes involving different price volatility behavior can be distinguished, one characterized by turbulent markets and another where markets are calming down.     

Interaction between message framing and consumers’ prior subjective knowledge regarding food safety issues

This study analyzed the interaction between message frames and recipients’ prior knowledge. The hypothesis is that less prior consumer knowledge will result in a larger framing effect. That is, if the subjective knowledge of the public is low, then the controversy created by mass media regarding a specific food-related event will be larger. Empirical results show that message frame has an influence on college students’ purchasing intentions. College students showed distinct responses in purchasing intention based on different headlines and different amounts of information within articles. The results further suggest that the framing effect depends not only on message frames, but also on the prior knowledge of the message recipient. Those who have less knowledge have larger variation in their purchase intention when responding to different message frames. This suggests that people with less knowledge are more likely to panic due to mass media reports regarding a food hazard issue. More informed consumers have less dramatic responses to food safety issues compared to less informed people.     

Food miles: Do UK consumers actually care?

The food miles concept, originating in the UK and given much prominence in the news media, has been used to imply that importing food from distant countries is inherently more wasteful than growing and consuming local produce. What impact is this potential non-tariff barrier having on consumer buying behaviour in UK supermarkets? Revealed preference surveys in four supermarkets show only 5.6% of 251 consumers nominated country-of-origin as one of the reasons for choosing a fresh food item they had just purchased. Furthermore, only 3.6% indicated that they had consciously chosen British products for the reason that such produce was “less harmful for the environment.” In contrast, stated preference surveys in the street found that 21.5% indicated that “food miles” or “the long distance it travels” would stop them buying New Zealand products. What people say may differ substantially from what they actually do in regard to “food miles.”     

丰田危机

在底特律三大汽车巨头刚刚破茧重生，仍处于竞争劣势的大背景下，丰田汽车召回事件融进了政治因素、民众情绪等复杂因素，而快速扩张过程中对传统的背景却是根本原因。     

Getting rid of trans fats in the US diet: Policies, incentives and progress

Artificial trans fats in foods increase chronic disease risk in the US population. Federal nutrition label regulation enacted in 2003 requires mandatory disclosure of trans fat content on packaged foods. This action created incentives for the food industry to reduce trans fats both in response to consumer demand and through competition to maintain product reputation. Subsequent public actions include a ban on trans fat use in New York city restaurants and lawsuits against food companies, which created further incentives to remove trans fats, especially in the food service industry. Industry has reformulated packaged foods and found substitutes for restaurant fry oils and trans fats are disappearing from the US food supply. Market response extends throughout the supply chain, and has spurred research to alter oilseed crop characteristics. The widespread and relatively rapid industry response likely has improved the quality of US diets, and demonstrates the potential for policy actions to spur such improvements.     

The welfare impact of food pathogen vaccines

Vaccines against several common foodborne pathogens are being developed and could substantially alter the policy tools available to address foodborne illness. However, little analysis is available to suggest how social welfare would be affected by consumer and industry responses to these new vaccines. To address this void, we use stated-preference data to estimate consumer willingness to pay (WTP) for food safety vaccines and then simulate the welfare impacts of subsidizing consumer purchases of the vaccine given two different industry responses: maintaining current levels of food safety vigilance and reducing food safety vigilance due to a moral hazard response that undermines consumer confidence in food safety. To obtain consumer preferences for the vaccine, we simultaneously estimate a three-equation model that recognizes the recursive nature of responses to questions probing respondents’ willingness to purchase vaccines and perceptions of the probability and severity of possible foodborne illness incidents and the joint distribution of unobservable components. Our simulations show large consumer WTP if vaccines are relatively inexpensive while the presence of moral hazard increases respondents’ willingness to pay and voluntary uptake of vaccine.     

A consumer-oriented model for analysing the suitability of food classification systems

The main function of food classification systems is to regulate the market and inform it (consumers above all) about the different types of products and their characteristics. However, the reality is that many of these systems give rise to confusion and prevent consumers from obtaining a clear idea of them, making the purchasing process more difficult. The objective of this study was to propose a method that can be used as a basis or reference framework for analysing the suitability of any food classification system, based on maximising consumer comprehension and learning, before introducing it into the market. The model proposed establishes the procedure and the necessary indicators for identifying the advantages and drawbacks of each of the different systems, making it possible to compare their suitability. The model was tested empirically by comparing the current classification of orange juices and Iberian ham with two different proposals, in an experiment conducted with an online consumer panel, and using MANCOVA to analyse the differences between the six indicators related to consumer learning results. It was concluded that the model is suitable for assessing the suitability of the classification systems, as it shows technical viability, ease of introduction in practically any situation and the ability to facilitate and guide the process of drawing up consumer-oriented food classification systems.     

Ground beef recalls and subsequent food safety performance

The U.S. Food Safety Inspection Service recalled more than 370 million pounds of meat and poultry products and oversaw 680 Class 1 recalls over 1998–2014. The cost to firms was about $109 million in lost market value (Pozo and Schroeder, 2016). Thomsen and McKenzie (2001) argue that firms internalize the costs of recalls, and Marino (1997) asserts that high food safety costs lead to food safety investment, but no research has examined the impact of recalls on plant food safety performance. Using performance on tests for Salmonella conducted by the Food Safety Inspection Service as a measure of food safety, this article examines the performance on Salmonella tests of ground beef plants with Class 1 recalls. The results show that plants have high Salmonella levels before and during the year of the recall and have much lower levels afterward. The paper also shows that ground beef plants with recalls are less likely to meet the FSIS standard for Salmonella and that the likelihood of failing to meet the standard increases as the standard becomes more stringent.     

Total and per capita value of food loss in the United States

There are few peer-reviewed or major published studies that estimate the total amount of food loss in developed countries and even fewer attempt to estimate the monetary value. We compiled estimates of the amount and value of food loss for more than 200 individual foods in the United States using the US Department of Agriculture’s Economic Research Service’s Loss-Adjusted Food Availability data and then aggregated these values to estimate the total value of food loss and the value by food group. The results indicate that in 2008, the estimated total value of food loss at the retail and consumer levels in the United States as purchased at retail prices was $165.6 billion. The top three food groups in terms of the value of food loss at these levels are: meat, poultry, and fish (41%); vegetables (17%); and dairy products (14%). Looking more closely at the estimates for the consumer level, this level of loss translates into almost 124 kg (273 lb) of food lost from human consumption, per capita, in 2008 at an estimated retail price of $390/capita/year. Food loss represents a significant share of household food expenditures: our estimates suggest that the annual value of food loss is almost 10% of the average amount spent on food per consumer in 2008 and over 1% of the average disposable income. This consumer level loss translates into over .3 kg (0.7 lb) of food per capita per day valued at $1.07/day. Our estimates of the total value of food loss in the United States and loss estimates by food group are useful in that they can generate awareness of the issue among the food industry members, governments, and consumers. Potential large-scale approaches and economic incentives to mitigate food loss in developed countries are also discussed.     

Modeling heterogeneity in consumer preferences for select food safety attributes in China

Food safety issues often arise from asymmetric information between consumers and suppliers with regards to product-specific attributes. Severe food safety scandals were observed recently in China. These events not only caused direct economic and life losses, but also created distrust in the Chinese food system domestically, as well as internationally. While much attention has focused on the problems plaguing the Chinese government’s food inspection system, little research has been dedicated to analyzing Chinese consumers’ concerns surrounding food safety. In this paper, we measure consumer preferences for select food safety attributes in pork and take food safety risk perceptions into account. Several choice experiment models, including latent class and random parameters logit, are constructed to capture heterogeneity in consumer preferences. Our results suggest that Chinese consumers have the highest willingness-to-pay for a government certification program, followed by third-party certification, a traceability system, and a product-specific information label. The results of this study call for the direct involvement of the Chinese government in the food safety system. A stricter monitoring system will not only improve consumer well-being in the short-run, but also restore consumers’ trust leading to a social welfare increase in the long run.     

Foreign—domestic intersections in US food policy

This essay probes the major points. of intersection between US domestic and foreign policies in the realm of food and agriculture. Five issue areas are of specific interest: the farm income/consumer price/food supply matrix; international agricultural trade relations; economic, strategic, and diplomatic applications of food resources; LDC agricultural development and global food security; and food assistance.     

Exposing organizational buyers to consumer magazine advertisements

The feasibility of using consumer magazines in support of more traditional industrial media in marketing programs designed to create awareness and goodwill among industrial buyers and purchasing influentials is examined. Specifically, magazines delivering at least 10 percent of those individuals influencing organizational purchases of $1000 or more are compared with trade publications. Exposure patterns are examined in total and by segments based on company size. Consumer magazines are found more cost efficient than industry-trade publications and should be considered for exposing purchasing influentials to institutional advertisement containing general appeals designed to build firm awareness among industrial buyers and influentials in different industries.     

Consumer preferences before and after a food safety scare: An experimental analysis of the 2010 egg recall

In August 2010, more than half a billion eggs were recalled in the U.S. because of a Salmonella outbreak. This study examines the effect of the recall with a unique pair of auction experiments investigating willingness to pay (WTP) for conventional and organic eggs, one conducted shortly before and one right after the recall with the same participants. In addition to the before and after bids, participants bid again after a negative information or balanced information treatment about the event. Accompanying surveys showed consumers had a high level of awareness of the recall but less knowledge of specific details, and viewed information on egg farm conditions as very important in their WTP. While there were no significant before and after differences, WTP for organic eggs significantly increased in the negative information treatment, and balanced information had a positive effect on consumer WTP for conventional eggs.     

Linking agricultural policies with obesity and noncommunicable diseases: A new perspective for a globalising world

In light of the shift in policy paradigm in agriculture from state intervention to market liberalisation and globalisation, this paper develops a series of hypotheses on the relationship between agricultural policies and consumer diets. The first hypothesis is that the paradigm shift has led to greater specialisation of production, so changing the ability and incentive for producers to supply certain foods relative to others. Second, the shift has affected farmgate prices (both up and down), so creating opportunities for the industries which purchase farm commodities (the food consuming industries – FCIs) to substitute lower priced ingredients, thereby influencing the nutritional quality and content of foods available in the marketplace. Third, it has increased the ability of the FCIs to “add value” through product innovation and marketing, creating a market characterised by highly differentiated products targeted to individualised preferences, thus increasing the acceptability of a wider variety and quantity of food products.     

Risk perceptions and food-handling practices in the home

Unsafe food-handling practices in the home are linked with foodborne illnesses that represent sizable costs on the US healthcare industry and welfare losses to households. Past consumer food-safety education programs have only been modestly successful. Optimism bias may distort food-safety risk perceptions encouraging participation in risky food behaviors. Using multiple years of the FDA Food Safety Survey data, we explore the link between behavior-specific risk perceptions and three food-handling practices: handwashing, avoiding cross-contamination, and proper refrigeration of cooked foods. This approach describes risk perceptions as endogenous variables and allows for the decomposition of factors that directly influence food-safety behaviors, from those that indirectly influence behavior by changing risk perceptions. Our results suggest well-designed targeted information campaigns aimed at improving people’s safe food-handling practices must first decrease people’s optimism in the safety of their current practices. Given the lack of regulatory options to influence behavior in the home, this may provide an effective tool to address issues in performing safe food handling.     

The role of consumer purchase and post-purchase decision-making in sustainable seafood consumption. A Spanish case study using carbon footprinting

Sustainable consumption in the food sector is a desirable goal which is often difficult to achieve depending as it does on the interaction of a broad set of factors, such as market prices or consumer preferences. In the current study, a distinction has been made between pre-purchase consumer decision-making, on the one hand, and purchase and post-purchase consumer decision-making, on the other. Purchase and post-purchase decisions are those that affect their actions directly. These include vehicle selection to purchase the products, shelf-time in the household or the cooking method employed. The main goal of this study was to evaluate the environmental profile in terms of carbon footprint (CF), of a range of scenarios with varying direct environmental decisions performed by consumers. More specifically, the CF of an iconic frozen seafood product in Spain (one package of frozen fish sticks of Patagonian grenadier) was modeled for a total of 24 scenarios of fish sticks consumption. Results showed a high variance in environmental impacts depending on the scenario chosen, proving the high variability in CF that the consumption of frozen seafood can show depending on consumer choices or needs. Additionally, results showed the relative importance of the consumption stage within the entire supply chain in terms of GHG emissions. Hence, important reductions may be achieved in the diet of an individual merely by improving the behavioral traits when purchasing and consuming food products. Consequently, consumers, if given the correct environmental guidelines through awareness campaigns, can play an active and relevant role in the reduction of the environmental profile of seafood products through behavioral modifications when purchasing and consuming them.     

Local impacts of a global crisis: Food price transmission,consumer welfare and poverty in Ghana

This paper takes a local perspective on global food price shocks by analyzing food price transmission between regional markets in Ghana. It also assesses the impacts of food price increases on various household groups. Taking the 2007–2008 global food crisis as an example, we show that prices for domestic grain products are highly correlated with world market prices. This is true both for products for which Ghana is highly import-dependent (e.g., rice) and the products for which Ghana is self-sufficient (e.g., maize). The econometric results also show that price transmission is high between regional producer markets and markets located in the country’s largest cities, and the distance between producer and consumer markets and the size of consumer markets matter in explaining the price transmission. The welfare analysis for households as consumers shows that the effect of world food prices appears relatively modest for the country as a whole due to relatively diverse consumption patterns within country. However, the national average hides important regional differences, both between regions and within different income groups. We find that the poorest of the poor—particularly those living in the urban areas—are hardest hit by high food prices. The negative effect of the food crisis is particularly strong in northern Ghana. The main explanations for this regional variation in the price effect is the different consumption patterns and much lower per capita income levels in the North of Ghana compared to other regions in the country.     

Food safety recall effects across meat products and regions

Food safety is one of the key issues for the international meat market. As a major meat exporter, few things facing the U.S. meat industry in recent years have garnered more attention than food safety events and policies. The impacts of Food Safety Inspection Services (FSIS) recalls on United States consumer meat demand are estimated using monthly grocery-scanner data identifying effects across products, geographic regions, and recall type. Results suggest beef E. coli recalls significantly reduce the demand for recalled ground beef contemporaneously among most, but not all, regions in the United States. Evidence of heterogeneity in demand impacts across regions and products is provided for the first time. Domestic and international implications for policy makers, industry leaders, and researchers are discussed.     

Consumer perceptions of best practice in food risk communication and management: Implications for risk analysis policy

As a consequence of recent food safety incidents, consumer trust in European food safety management has diminished. A risk governance framework that formally institutes stakeholder (including consumer) consultation and dialogue through a transparent and accountable process has been proposed, with due emphasis on risk communication. This paper delivers actionable policy recommendations based on consumer preferences for different approaches to food risk management. These results suggest that risk communication should be informed by knowledge of consumer risk perceptions and information needs, including individual differences in consumer preferences and requirements, and differences in these relating to socio-historical context associated with regulation. In addition, information about what is being done to identify, prevent and manage food risks needs to be communicated to consumers, together with consistent messages regarding preventative programs, enforcement systems, and scientific uncertainty and variability associated with risk assessments. Cross-cultural differences in consumer perception and information preferences suggest a national or regional strategy for food risk communication may be more effective than one applied at a pan-European level.