The Effect of Mad Cow (BSE) Scare on Beef Demand and Sales Loss: The Case of İzmir


Abstract: This paper investigates the effect of the BSE scare on beef consumption due to the intense media coverage. Using monthly data, a beef demand model for January 1995-February 1997 period is estimated for İzmir Province. Beef sales dropped immediately after the media coverage on BSE in April 1996 and continued through June 1996 when the intense media coverage stopped. The econometric model reveals that beef sales in İzmir would have been 36.4% higher if the BSE crisis never occurred. The annual individual willingness to pay is $0.5224 per year to avoid consuming BSE contaminated meat.

Keywords: Health risk, demand model, mad cow (BSE), consumer surplus, sale loss

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