Food Product Recalls: Trends and Demand Impacts

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Tselepidakis, Elina
Lichtenberg, Erik
Food product recalls, the removal of risky food products from the marketplace, can impose significant burdens for consumers, producers, and regulators. The purpose of this dissertation is to offer an in-depth investigation of the trends and demand impacts of food product recalls. The first objective is to analyze trends and patterns of food product recall events from 2004 to 2013. The analysis considers multiple factors, including the types of foods being recalled, the reasons for initiating the recalls, the severity of the risks posed by the recalled products, and the geographic distribution. The second objective is develop a general Bayesian model to illustrate how consumers form perceptions of risk based on personal experiences and external signals, such as recall events. The model illustrates frequently observed behavior following the release of negative information: an immediate change in behavior, followed by a gradual return to previous, routine behavior. The third objective is to estimate the impact of leafy green recall events on the demand for packaged leafy green products by analyzing disaggregated household purchasing data. The results of this analysis suggests that iceberg and romaine recall events negatively impacted demand for the implicated leafy green in the weeks immediately following the recall. The fourth objective is to estimate the impact of STEC-contaminated ground beef recall events on the demand for ground beef products, differentiating between recalls prompted by consumer illness investigations and those prompted by laboratory testing. The results suggest that the impacts of recalls prompted by consumer illnesses outbreaks were often greater in magnitude and lasted longer than the impacts of recalls prompted by pathogen testing.