How Consumers Respond to Food Safety Crisis: A Study of Peanut Butter and Egg Recalls on Consumer Behavior

34 Pages Posted: 11 Oct 2018

See all articles by Yanwen Chen

Yanwen Chen

Duke University

Christopher Timmins

Duke University - Department of Economics

Date Written: September 18, 2018

Abstract

In 2009, salmonellosis was found in peanut processed by the Peanut Corporation of America, resulting in 714 cases of severe food poisoning from ingesting contaminated peanut butter. In 2010, over 1900 people were hospitalized due to salmonella outbreak from eggs produced in two Iowa farms. Using a modified regression discontinuity design, this paper examines how consumers responded to these two recent and acute national food safety crises, and whether consumers’ responses correlate with their socioeconomic statuses. The regression results show that while the sale of peanut butter suffered a statistically significant decrease at 13.7% in the second week after the recall announcement, the sale in eggs was not significantly affected. The socioeconomic statuses of consumers did not play a determining factor in their purchasing behaviors in either case. This finding implies that national food recalls have mixed effect on preventing consumers from purchasing potentially contaminated products regardless of socioeconomic classes.

Keywords: Food Safety, Recall, Regression Discontinuity

JEL Classification: I18, Q18

Suggested Citation

Chen, Yanwen and Timmins, Christopher D., How Consumers Respond to Food Safety Crisis: A Study of Peanut Butter and Egg Recalls on Consumer Behavior (September 18, 2018). Economic Research Initiatives at Duke (ERID) Working Paper Forthcoming, Available at SSRN: https://ssrn.com/abstract=3251299 or http://dx.doi.org/10.2139/ssrn.3251299

Yanwen Chen

Duke University

100 Fuqua Drive
Durham, NC 27708-0204
United States

Christopher D. Timmins (Contact Author)

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States
919-660-1809 (Phone)
919-684-8974 (Fax)

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