Toxic Algae Contamination and Demand for Shellfish: A Case Study of Demand for Mussels in Montreal

Abstract

Toxic algae blooms are a worldwide phenomena, which appear to be increasing in frequency and severity. These natural events cause product contaminations that often have significant economic consequences, including supply interruptions due to closed fishing grounds, losses from human illness, and losses due to a decline in demand for the affected products. This paper evaluates the impacts of a toxic algae bloom contamination event on demand for unaffected shellfish. As an empirical example of the economic losses the shellfish industry experiences for these events, demand for mussels in Montreal is estimated using firm-level data and proxies for consumer information, during and after domoic acid contamination of Prince Edward Island mussels. Sales losses due to decreased demand are calculated. Implications of this issue for seafood safety and management policies are discussed.