Old MacDonald had a farm. And on his farm he had a mad cow, a chicken with flu, a feverish pig, and a fortunate, healthy lamb. Felix chose the lamb for dinner, but between farm and plate it had been contaminated with melamine. The cheese was made with dioxin-tainted milk. Food scares have populated headlines since, over twenty years, the first reports that Bovine Spongiform Encephalopathy - mad cow disease - might be transmissible to humans.
This has raised both consumer concern and political attention. Some quarters have the perception that the number of these crises is increasing and the safety of our food deteriorating. At the Department of Statistics of the University of Bologna, we have examined typical public reactions in the aftermath of a food safety scare.
In response to the first news that BSE-infected meat could lead to a similar disease - a variant of Creutzfeld-Jakob disease - in humans, people turned to science for reassurance. Unfortunately, science does not move as fast as television signals. The first “worst-case scenarios“ published could not exclude the death of millions of British people as a result of eating BSE-infected meat.
Panic took hold. A sudden drop was recorded in consumption and prices of beef. Today, we know that the true impact was far more modest. There were 164 deaths attributed to vCJD in the UK between 1995 and May 2009. From the 2000 peak of 28, the death toll fell to five annually between 2005 and 2007 and one in 2008. In comparison, 2007 saw 8 724 alcohol- and 32 Salmonella-related deaths. No matter to public perception: BSE is generally feared more than salmonella.
Beef-Consumption Recovered Slower Than Prices
Psychologists explain this quandary by our tendency to overestimate new and small risks while underestimating well-known - albeit much larger - risks. More surprising is the rapid abatement of the sudden waves of panic raised by media attention. Consumers gradually go back to their usual behaviour - although with some persisting anxiety - even without conclusive and reassuring scientific evidence that the risk either is small or has been controlled.
Economists have studied this pattern by looking at the price and consumption of beef, the intensity of media coverage and even prices in the stock-market. In the first year of the crisis, 1996, beef-related securities on the London Stock Exchange saw their profits reduced by 75%, average per-capita consumption of beef and veal in the UK fell by 20%, and the price of beef mince was 10% lower, down to the levels of 1989. One year later, all three figures were rising again. By February 1997 prices were back on track, while consumption took a couple of extra years to catch up with the past (declining) trend.
Consumers Tend to Remain Anxious
Consumer responses to scares show similar patterns, although the intensity and duration of the crisis varies. In other words, food scares have a common “shape“. Empirical research grounded on sociologic theories has explained this by looking at consumer (or stock price) response to media coverage. In the first stage of the crisis, news about a potential food hazard is released. Initial consumer concern mainly focuses on discovering more information. As concern mounts, so does media attention, so reinforcing consumer concern. Inevitably, panic emerges.
This so-called “news spiral“ is also well explained by economics: in the market for news, people demand more information and so the media supply increasing coverage, often regardless of emerging facts about the risk factor. There is good evidence that the distinction between bad and reassuring news is irrelevant - just recalling the risk factor has a negative impact on consumers. Eventually, media attention declines, public concern mitigates and a new equilibrium is reached. In time, a full recovery in consumption may be seen - especially when prices stay lower - although consumers do tend to remain anxious and become even more responsive in a scare comeback.
Have No Fear!
Official statistics show that per-capita UK beef consumption in 2007 was 15% higher than in 1995, thanks to a more objective evaluation of risk, the relative fall of price and - especially - less media coverage. Eating has never been safer than today, but information travels faster than ever. Furthermore, as markets go global, the scale of food scares is larger compared to incidents in local food chains.
Economists argue that basing food choice on subjective risk perception is irrational and overreaction is not the best outcome for the societal welfare, but as psychologists show, people weigh the possibly small probabilities of a food risk with the severity of the potential adverse outcome. We don't like to think that eating dinner is a risky business. When media communicate fear, it is easier to switch to another supermarket shelf than to rely on a rational assessment of probabilities. Old MacDonald needs a press officer in his farm.