Estimating the Market Effect of a Food Scare: The Case of Genetically Modified Starlink Corn

42 Pages Posted: 30 Apr 2005

See all articles by Colin A. Carter

Colin A. Carter

University of California, Davis - Department of Agricultural and Resource Economics

Aaron Smith

University of California, Davis - Department of Agricultural and Resource Economics

Date Written: August 2006

Abstract

In 2000, a genetically modified corn variety called StarLink that was not approved for human consumption was discovered in the food-corn supply. To estimate the price impact of this event on the U.S. corn market, we develop the relative price of a substitute method. This method applies not only to the StarLink event but also to rare events in other markets. We find that the contamination led to a 6.8 percent discount in corn prices and that the suppression of prices lasted for at least a year.

Keywords: Genetically modified organisms, GMOs, StarLink Corn, food safety

JEL Classification: Q11, Q18, C22

Suggested Citation

Carter, Colin A. and Smith, Aaron D., Estimating the Market Effect of a Food Scare: The Case of Genetically Modified Starlink Corn (August 2006). Available at SSRN: https://ssrn.com/abstract=711322 or http://dx.doi.org/10.2139/ssrn.711322

Colin A. Carter (Contact Author)

University of California, Davis - Department of Agricultural and Resource Economics ( email )

One Shields Avenue
Davis, CA 95616
United States

Aaron D. Smith

University of California, Davis - Department of Agricultural and Resource Economics ( email )

One Shields Avenue
Davis, CA 95616
United States
530-752-2138 (Phone)
530-752-5614 (Fax)

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