Consumer Response to a Food Safety Shock: The 2006 Food-Borne Illness Outbreak ofâE. coliâO157: H7 Linked to Spinach

Abstract

A retail demand model measured the impact of the Food and Drug Administration’s 2006 announcement warning consumers about E. coli O157: H7 contamination in spinach. Model results indicated that bulk lettuces were shock substitutes (in contrast to price substitutes) as consumers purchased fewer spinach products and more bulk lettuce of all types. Results also showed that consumers initially moved away from bagged salads without spinach; but consumer confidence rebounded quickly and expenditures rose. Over a period of sixty-eight weeks, retail expenditures decreased 20% for bagged spinach and 1% for bulk spinach. Retail expenditures for all leafy greens declined just 1%.