Food Safety Incident, Public Health Concern, and Risk Spillover Heterogeneity: Avian Influenza Shocks as Natural Experiments in China’s Consumer Markets

Abstract

Background: Food safety incidents have aroused widespread public health concern, causing food price risk. However, the causal paths remain largely unexplored in previous literature. This paper sets out to identify the relations of local and spatial spillovers of food safety incidents and public health concerns to food price risk in consumer markets within a setting with heterogeneous food safety risk levels. Methods: (i) Theoretically, unlike prior work, this paper decomposes food safety risks into food safety incidents (objective incident component) and public health concern (subjective concern component). This article develops a theoretical framework of causality to capture the underlying causal pathways motivated by the theories of limited attention and two-step flow of communication. (ii) Empirically, using avian influenza shocks in China’s poultry markets as natural experiments, this paper differentiates between low- and high-risk food and incidents. The article adopts dynamic spatial panel models to analyze potential nonlinearity, moderation, and mediation in the spillover of food safety risk to food price risk for a long panel of 30 provinces covering the November 2007 to November 2017 period. Results: (i) Food safety incident alone only triggers high-risk food price risk, not low-risk food price risk. (ii) Public health concern amplifies nonlinear food price risk triggered by food safety incident. (iii) High-risk incident intensifies negative pressure of public health concern on food price risk. (iv) Food safety incident indirectly affects high-risk food price risk through public health concern. Conclusions: Using a setting with heterogeneous risk levels, this paper documents that (i) food safety incident itself does not necessarily determine food price risk, whereas it is actually public health concern that directly causes nonlinear food price risk; (ii) public health concern spillover to food price risk is negatively moderated by high-risk incident, and (iii) food safety incident spillover to high-risk food price risk is mediated by public health concern. The findings complement current research by (i) elucidating the diverse impacts of food safety incident and public health concern on food price risk, which are obscure in previous literature, and (ii) highlighting that heterogeneous food and incident risk levels matter for determining food price risk spillover.

Development and Validation of a Questionnaire on Consumer Psychological Capital in Food Safety Social Co-governance

“…With the transformation of economic and social structures and the development of market economy, the diversity of food types and food supply abundance make food quality and safety a common societal concern and bring great challenges to food safety supervision. A series of food safety scandals in recent years have reflected the inability of traditional regulatory systems to adapt to society’s need for safe food ( Wang et al, 2018 ; Yi et al, 2019 ). The government urgently needs to find more effective approaches to food safety governance in response to public expectations, for public confidence in the government’s ability to manage food safety risks was diminished and shaken ( Halkier and Holm, 2006 ).…”

“…In China, the government previously played a dominant role in regulating and monitoring food safety ( Liu et al, 2019 ). Excessive government intervention suppressed the market’s regulatory role, and safety incidents still occur frequently ( Wang et al, 2018 ; Yi et al, 2019 ). In this circumstance, more effective approaches to food safety governance must be explored.…”

Food Safety Trust, Risk Perception, and Consumers’ Response to Company Trust Repair Actions in Food Recall Crises

“…Information communication is a crucial factor influencing seller-buyer trust. When examining the role of crisis communication in product crisis situations, the theory of consumer trust repair and its various iterations have become the most dominant focus of research since its start in the mid-2000s [2,16,42]. It has been applied in various domains, such as various manufacturers [16,43], service providers [43,44], and E-commerce businesses [45].…”

Disease Outbreak, Health Scare, and Distance Decay: Evidence from HPAI Shocks in Chinese Meat Sector

“…We introduce theories of limited attention [34] and two-step flow of communication [35], and decompose zoonotic disease shocks into zoonotic disease outbreaks (objective incident component) and public health scares (subjective information component), so that we can clearly distinguish and isolate the spillovers of the components to meat price risks (Figure 2). Following our prior work [36,37], we incorporate paths of information and communication into the classical theoretical framework of food price fluctuations and transmission. (i) In the age of big data, when zoonotic disease outbreaks occur, Internet media, who serve as online opinion leaders, disseminate zoonotic disease information during second-step flow.…”