Estimating the Market Effect of a Food Scare: The Case of Genetically Modified Starlink Corn

Estimating the Market Effect of a Food Scare: The Case of Genetically Modified Starlink Corn. Carter, C. A & Smith, A. The Review of Economics and Statistics, 89(3):522–533, The MIT Press, 2007.

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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% discount in corn prices and that the suppression of prices lasted for at least a year.

@article{carter2007estimating,
  title={Estimating the Market Effect of a Food Scare: The Case of Genetically Modified Starlink Corn},
  author={Carter, Colin A and Smith, Aaron},
  journal={The Review of Economics and Statistics},
  volume={89},
  number={3},
  pages={522--533},
  year={2007},
	url={https://files.asmith.ucdavis.edu/2007_REStat_CS_StarLink.pdf},
	keywords={agriculture},
	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\% discount in corn prices and that the suppression of prices lasted for at least a year.},
	addendum={\textbf{Winner of Quality of Research Discovery Award, AAEA, 2008.}},
  publisher={The MIT Press}
}

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