Earlier this month, ABC News reported that 14 people were described as ill, possibly due to a salmonella outbreak in Alabama. Though infestations of salmonella happen almost every year, during the outbreak from 2010, there were 1,939 reported illnesses that were likely associated with shell eggs. This can lead one to believe that product sales of the item in question may decline. Two researchers look into the California egg purchases using a large scanner-level dataset from a national grocery chain as well as a difference-in-differences approach to see the effect of three consecutive outbreaks.
Chantal Toledo from Mathematica Policy Research and Sofia Berto Villas-Boas from the University of California, Berkeley, published the article “Safe or Not? Consumer Responses to Recalls with Traceability” in the AAEA Journal: Applied Economic Perspectives and Policy.
Toledo says “given the evidence of spillovers, and assuming all non-recalled eggs were safe, the results show that producers of safe eggs were meaningfully affected.” She continued, “we find a 7 to 9 percent significant reduction in egg sales in California (Northern and Southern California regions) and we show that the effect lasted at least three months after the event.”
If you are interested in setting up an interview with either author, please contact Allison Scheetz in the AAEA Business Office.
ABOUT AAEA: Established in 1910, the Agricultural & Applied Economics Association (AAEA) is the leading professional association for agricultural and applied economists, with 2,500 members in more than 60 countries. Members of the AAEA work in academic or government institutions as well as in industry and not-for-profit organizations, and engage in a variety of research, teaching, and outreach activities in the areas of agriculture, the environment, food, health, and international development. The AAEA publishes two journals, the American Journal of Agricultural Economics and Applied Economic Perspectives & Policy, as well as the online magazine Choices. To learn more, visit http://www.aaea.org.
Source: Agricultural & Applied Economics Association (AAEA)
