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Abstract
Using news coverage of food safety as an indicator of public attention to food
pathogen issues in meat products, we found the 1993 E. coli O157:H7 contamination of
hamburgers likely permanently changed consumers' perception of beef safety. A food
consumption model with rational habit persistence is developed to examine whether
consumers make forward-looking consumption decisions accounting for expectations of
future food safety. We document clear evidence of forward-looking consumption behavior, which suggests that government regulations implemented subsequent to the 1993 event to protect consumers from ignorance or cognitive defects may be ineffective.