When Diseases Hit Aquaculture: An Experimental Study of Spillover Effects from Negative Publicity

Abstract

Abstract Aquaculture, as all animal production, is exposed to diseases which can cause negative publicity and market impacts. A recent example is the Chilean salmon farming industry, which is currently facing unprecedented economic losses due to an outbreak of infectious salmon anemia. We conducted two consumer experiments to investigate spillover effects of negative publicity on consumer valuation of seafood products from unaffected countries and species, as well as a potential mitigating strategy that an affected industry might use. We find significant negative spillover effects on the same species produced in unaffected countries and on other fish species farmed within the affected country. We also find that building a brand association with an upscale retailer does not improve the consumer valuation (i.e., no positive spillover effects) for products from directly and indirectly affected countries of the affected species. JEL Classification Codes: Q13, Q22.