THE EFFECT OF FOOD-SAFETY RELATED INFORMATION ON CONSUMER PREFERENCE: THE CASE OF THE BSE OUTBREAK IN JAPAN
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This paper uses a nonparametric approach for testing whether there is a structural change in the meat demand of Japanese consumers due to the BSE (mad-cow disease) outbreak in the country. The axiom of revealed preference is utilized to test the stability of preference in Japanese meat consumption. The matrix of weak form of revealed preference (WARP) is partitioned and Kruskal-Wallis statistics are derived to evaluate whether the switches of preference are transitory or due to a structural change. Empirical results show that Japanese meat demand is currently unstable and has undergone a structural change, synchronized with the BSE outbreak in Japan in mid-September 2001.