Food Safety and Habits in U.S. Meat Demand under Rational Expectations

A consumer life-cycle demand system is built to investigate the presence of rational habits and the effects of food safety information on U.S. meat consumption. Information extracted from the popular press coverage of food safety events is used to approximate consumers' "true" perception of food safety. At quarterly frequencies, U.S. meat demand is found to be intertemporally nonseparable. During the post-1998 period, habit persistence is found to dominate inventory adjustment in beef demand. In general, food safety information is found to adversely affect meat demand. The ongoing research focuses on numerical simulations of consumer responses to alternative food safety event scenarios to evaluate the economic significance of food safety information and habit formation in U.S. meat demand