How Safety Recalls Affect Consumer Preferences for Eggs: An Experimental Analysis
Date
2016-03
Journal Title
Journal ISSN
Volume Title
Publisher
Department of Applied Economics and Statistics, University of Delaware, Newark, DE.
Abstract
This
study
analyzes
a
unique
data
set
to
estimate
how
consumers
respond
to
food-‐safety
recalls.
In
August
2010,
more
than
half
a
billion
eggs
were
recalled
because
of
a
Salmonella
outbreak.
We
conducted
experimental
auctions
shortly
before
and
after
the
recall
outside
the
affected
area.
Our
results
suggest
that
the
recall
had
a
heterogeneous
effect
on
consumers’
willingness
to
pay
for
both
conventional
and
organic
eggs
rather
than
causing
a
unidirectional
shift,
and
in
general,
the
recall
did
not
lead
to
a
statistically
significant
change
in
consumer
preferences
for
shell
eggs.
This
seemingly
counter-‐
intuitive
finding
coincides
with
prior
empirical
evidence
regarding
how
safety
recalls
affect
consumer
behavior.
In
addition,
we
examined
if
providing
additional
positive
information
on
the
recall
can
mitigate
the
negative
media
information.
Results
show
that
it
has
a
marginally
significant
positive
effect
on
consumer
willingness
to
pay
for
conventional
eggs.
Description
Keywords
Consumer Preferences, Laboratory Experiments, Revealed Preference, Food Recall, Shell Eggs
Citation
Li, T., J.C. Bernard, Z.A. Johnston, K.D. Messer, and H.M. Kaiser. 2016. “How Safety Recalls Affect Consumer Preferences for Eggs: An Experimental Analysis.” Applied Economics & Statistics Research Report, University of Delaware, RR16-‐03.