MSU Agricultural, Food, and Resource Economics
Dissertations, Theses and Plan B Papers -- Abstract
, William P.. Consumer Response to Risk Information: A Case Study of the Impact of the Alar Scare on New York City Fresh Apple Demand.
Major Professor: van Ravenswaay.
This study examined the impact of the U.S. Alar scare on the New York City retail
fresh apple market. The principal objective of the research was to develop a
framework for estimating consumer response to risk information. The effect over
time of increasing amounts of risk information, the lagged effect of media coverage,
and one time shifts in the demand curve were examined. Other objectives included
estimating revenue losses to retailers in New York City and providing policy
implications and suggestions for dealing with food scare incidents that could
occur in the future.
An econometric model of demand for fresh apples in New York City was constructed
and monthly data collected from January 1980 to July 1989. Variables used in
the model included own price, price of substitutes, seasonality, and a measure
of risk information available to consumers about the Alar scare. The information
variable was the monthly number of articles written in the New York Times during
the observation period. This variable was used as a proxy for media coverage
The major finding of the study was that the Alar incident was found to have
influenced demand for fresh apples in New York city. It appears that demand
fell as early as July of 1984 representing a one time sustained shift in demand
during the observation period.