Abstract

Vibrio vulnificus (V. vulnificus) is a naturally occurring bacterium found in the marine environment of the Gulf of Mexico. The consumption of raw oyster contaminated with this bacterium can lead to serious illness or death among individuals with weakened immune systems. In response to several illness and death cases associated with V. vulnificus, California initiated a program in March 1991 that required oyster producers to notify potential consumers about the risk side effects of the consumption of raw Gulf oysters. Shortly after that, other states such as Florida and Louisiana initiated similar warning label programs. In addition, there was tremendous media coverage of the issue of V. vulnificus food scare and the warning labels. The primary objective of this study is to consider the impact of mandatory warning labels and associated media coverage within the context of a complete demand system. The demand for Gulf, Pacific, imported oysters, and oyster originated in the East Coast and Chesapeake Bay was estimated using an inverse almost ideal demand system (IAIDS). Quarterly time series data from1980-2006 are used in the analysis. The results confirm our hypothesis that the warning labels and the associated media attention had strongly affected the consumers’ expenditures toward the Gulf and other competing oyster products. More specifically, the demand for the Gulf product has reduced by more than 19% by the end of the sample period. In addition, the results show increases in the demand for Pacific and Imported products.

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