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Can Generic Advertising Alleviate Consumer Concerns Over Food Scares?

Messer, Kent D., Harry Kaiser, Collin R. Payne, and Brian Wansink. (2011). Can Generic Advertising Alleviate Consumer Concerns Over Food Scares? Applied Economics, 43(12), 1535-1549. doi: 10.1080/00036840802600616.

Food safety scares are a major concern to the food industry and to consumers and can result in the loss of millions of dollars of sales. We utilized experimental economics to measure consumer's willingness to pay (WTP) for a hamburger and their concern for food safety after viewing or not viewing a media video regarding Bovine Spongiform Encephalopathy (also known as BSE or mad cow disease). There were 227 participants ranging in age from 18–63 who underwent an experimental procedure in which they were given cash and prompted to bid for various items, based on their cash values, reflecting their WTP.

Participants were divided into four groups: those who saw a series of advertisements for beef, those who watched a video regarding BSE (mad cow disease), those who saw no media content at all, and those who saw both the beef advertisements and the BSE video. After viewing or not viewing the videos, participants were presented with a hamburger and asked to bid on it to reflect their willingness to pay. Consumers who only viewed the beef advertisements had the highest average WTP, $2.52. Consumers who did not view any media content had an average WTP of $2.14 and those who viewed both the beef advertisements and BSE information were willing to pay $2.07 on average. However, those consumers who only saw the video of BSE information were only willing to pay $0.88. The stark difference between the WTP of the group that saw both beef advertisements and the BSE video provides clear evidence that generic advertising for a product can be a useful tool in offsetting negative messages by the media.