Dairy-Borne Disease Outbreak and Milk Demand: A Study Using Outbreak Surveillance Data

Abstract

We utilize the outbreak surveillance data from the Centers for Disease Control and Prevention (CDC) to examine whether consumer demand was impacted by the outbreak of foodborne disease. An additional person sickened due to the ingestion of tainted cheese products at home is found to decrease per capita milk demand in New York State by 0.13% (or 0.07 pound), while milk- and ice cream-borne disease outbreaks, occurring at home or public places, are found to have no impact on fluid milk demand. Our results imply the existence of the word-of-mouth effects, which cannot be tested by the popular information/media index approach used to measure food borne disease outbreaks. We also find that a 7% increase in generic advertising expenditures or a 10% increase in expenditures on non-advertising marketing activities can offset the negative influence of one ill person in cheese-borne disease outbreaks at home, while holding other demand factors constant.

Keywords: Centers for Disease Control and Prevention, dairy-borne disease outbreak (DBDO), fluid milk demand, food-borne disease outbreak (FBDO), outbreak surveillance data

JEL Classification: Q11, M37, I1