Hostname: page-component-586b7cd67f-rcrh6 Total loading time: 0 Render date: 2024-11-23T05:32:22.706Z Has data issue: false hasContentIssue false
  • English
  • Français

Food Safety and Spinach Demand: A Generalized Error Correction Model

Published online by Cambridge University Press:  15 September 2016

Carlos Arnade ,
Fred Kuchler  and
Linda Calvin
Carlos Arnade
Affiliation:
Economic Research Service, U.S. Department of Agriculture, in Washington, D.C.
Fred Kuchler
Affiliation:
Economic Research Service, U.S. Department of Agriculture, in Washington, D.C.
Linda Calvin
Affiliation:
Economic Research Service, U.S. Department of Agriculture, in Washington, D.C.
Get access

Abstract

We estimate an error correction model representing demand for leafy green vegetables but generalize the structure to allow for adjustment to one conspicuous shock. We investigate whether the adjustment rate to the U.S. Food and Drug Administration's (FDA) 2006 warning that fresh spinach was contaminated with deadly bacteria was distinct from the overall adjustment rate. Our model allows consumers to correct both for past errors and for any errors in their reaction to the shock. This method yields an estimate of the adjustment rate to the policy shock and points to an improved estimate of the duration of policy impacts.

Keywords

error correction modeladjustment ratesAIDS demand modelretail food demand
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 40 , Issue 2 , August 2011 , pp. 251 - 265
Copyright
Copyright © 2011 Northeastern Agricultural and Resource Economics Association 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Arnade, C., Calvin, L., and Kuchler, F. 2009. “Consumer Response to a Food Safety Shock: The 2006 Foodborne Illness Outbreak of E. coli 0157: H7 Linked to Spinach.” Review of Agricultural Economics 31(4): 734–750.CrossRefGoogle Scholar
Asche, F., and Salvanes, K.G. 1996. “Dynamic Factor Demand Systems and the Adjustment Speed Towards Equilibrium.” The Canadian Journal of Economics 29 (Special Issue: Part 2): S576–S581.Google Scholar
Balcombe, K., and Rapsomanikis, G. 2008. “Bayesian Estimation and Selection on Nonlinear Vector Error Correction Models: The Case of the Sugar-Ethanol-Oil Nexus in Brazil.” American Journal of Agricultural Economics 90(3): 658–668.CrossRefGoogle Scholar
Calvin, L. 2007. “Outbreak Linked to Spinach Forces Reassessment of Food Safety Practices.” Amber Waves 5(3): 24–31.Google Scholar
Centers for Disease Control and Prevention. 2006a. “Ongoing Multistate Outbreak of Escherichia coli serotype 0157:H7 Infections Associated with Consumption of Fresh Spinach—United States, September 2006.” Morbidity and Mortality Weekly Report 55 (September 26): 55 (Dispatch): 1-2. Available at http://www.cdc.gov/mmwr/preview/mmwrhtml/mm55d926al.htm (accessed January 2010).Google Scholar
Centers for Disease Control and Prevention. 2006b. “Update on Multi-State Outbreak of E. coli 0157:H7 Infections from Fresh Spinach.” September 28, 2006. Available at http://www.cdc.gov/ecoli/2006/september/updates/092806.htm (accessed January 2010).Google Scholar
Centers for Disease Control and Prevention. 2006c. “Timeline for Reporting of E. coli Cases.” September 19, 2006. Available at http://www.cdc.gov/ecoli/reportingtimeline.htm (accessed January 2010).Google Scholar
Duffy, M. 2003. “Advertising and Food, Drink, and Tobacco Consumption in the United Kingdom: A Dynamic Demand System.” Agricultural Economics 28(1): 51–70.CrossRefGoogle Scholar
Edgerton, D., Assarsson, B., Hummelmose, A., Laurila, I., Rickersten, K., and Vale, P. 1996. “The Econometrics of Demand Systems: With Applications to Food Demand in the Nordic Countries.” Advanced Studies in Theoretical and Applied Econometrics vol. 34. Dordrecht; Kluwer Academic Publishers, Dordrecht, Holland.Google Scholar
Enders, W. 2003. Applied Econometric Time Series, 2nd Edition. New York: Wiley. Google Scholar
Engle, R.F., and Granger, C.W.J. 1987. “Co-Integration and Error Correction: Representation, Estimation, and Testing.” Econometrica 55(2): 251–276.CrossRefGoogle Scholar
Friesen, J. 1992. “Testing Dynamic Specifications of Factor Demand Equations for U.S. Manufacturing.” The Review of Economics and Statistics 74(2): 240–250.CrossRefGoogle Scholar
Friesen, J., Capalbo, S., and Denny, M. 1992. “Dynamic Factor Demand Equations in U.S. and Canadian Agriculture.” Agricultural Economics 6(3): 251–266.CrossRefGoogle Scholar
Karagiannis, G., and Mergos, G. 2002. “Estimating Theoretically Consistent Demand Systems using Cointegration Techniques with Application to Greek Food.” Economics Letters 74(2): 137–143.CrossRefGoogle Scholar
Nzuma, J., and Sarker, R. 2010. “An Error Corrected Almost Ideal Demand System for Major Cereals in Kenya.” Agricultural Economics 41(1): 43–50.CrossRefGoogle Scholar
Shin, A. 2006. “Fresh Spinach Declared Safe to Eat—Self-Regulation Called Insufficient to Avoid Outbreak,” The Washington Post, September 30.Google Scholar
U.S. Food and Drug Administration, Center for Food Safety and Applied Nutrition. 2006. “Nationwide E. coli 0157:H7 Outbreak: Questions and Answers.” September 16, 2006; Updated October 20, 2006. http://www.cfsan.fda.gov/∼dms/spinacqa.html (accessed January 2010).Google Scholar