Consumer reaction and behaviour in response to food safety crises

This paper explores aggregate consumer reaction to food scares by means of a stochastic demand model and illustrates an application on Italian and US meat scares and a milk contamination case in Oahu, Hawaii.. The empirically estimated patterns are compared with a sociological view of aggregate public reaction and some consistence is found. The model also allows to take into account situations when the crisis resurges or other scares than the original affect the same product. The empirical evidence for the selected food scares explored in this paper shows that the impact of food scares on consumer preferences is relatively short-lived, although major structural adjustment may intervene through price changes. The method suggested in this paper allows a period-by-period monitoring of consumer response to communicated risk factors, without requiring an evaluation of the variegated impact of information provided by media.