Estimating the Market Effect of a Food Scare: The Case of Genetically Modified Starlink Corn
42 Pages Posted: 30 Apr 2005
Date Written: August 2006
Abstract
In 2000, a genetically modified corn variety called StarLink that was not approved for human consumption was discovered in the food-corn supply. To estimate the price impact of this event on the U.S. corn market, we develop the relative price of a substitute method. This method applies not only to the StarLink event but also to rare events in other markets. We find that the contamination led to a 6.8 percent discount in corn prices and that the suppression of prices lasted for at least a year.
Keywords: Genetically modified organisms, GMOs, StarLink Corn, food safety
JEL Classification: Q11, Q18, C22
Suggested Citation: Suggested Citation
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