How Consumers Respond to Food Safety Crisis: A Study of Peanut Butter and Egg Recalls on Consumer Behavior
34 Pages Posted: 11 Oct 2018
Date Written: September 18, 2018
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: Suggested Citation