The Impacts of Food Safety Incidents on U.S. Beef Trade: A Gravity Model Approach

Abstract

The present paper examines the impacts of food safety incidents on U.S. beef trade using a gravity model approach. With the variable of food safety incidents (BSE and FSIS beef recalls) and free trade agreements, the gravity models of export and import equations are estimated by the random-effect estimation. The estimated results confirm the general intuition of the gravity model in beef export equation and indicate that the occurrence of BSE could make a huge loss for U.S. beef exports. Furthermore, the volumes of beef that U.S. imports from other countries could have benefit from the free trade agreement.