Epsilon Archive for Student Projects

Abstract

Shifting towards plant-based diets with reduced red meat consumption is a global priority in both food and environmental policies. While studies on this transition have primarily been confined to experimental economics, analyses of observational data in response to red meat demand shocks have focused on substitution effects with other animal proteins. This study examines the long-term effects of the Bovine Spongiform Encephalopathy (BSE) outbreak on beef consumption in the EU compared to plant-based products. We specifically investigate whether the decline in beef consumption persisted after the outbreak. Using an event study methodology that incorporates dynamic effects, we analyze data from 1980 to 2020. Our findings reveal that the BSE outbreak triggered a substantial and persistent decrease in beef consumption. Compared to pre-outbreak levels, beef consumption declined by 79% relative to pulses (legumes), 29% relative to cereals (grains), and 27% relative to vegetable oils. Notably, the impact on beef consumption compared to other meats (pork, chicken, or fish) was less pronounced. Moreover, beef consumption never fully recovered its pre-outbreak relationship with plant-based food groups, unlike its recovery relative to other meats. Given the link between BSE and a fatal human brain disease, a key implication of these findings is that they enable the estimation of the current willingness-to-pay (WTP) for a 1% reduction in red meat consumption relative to plant-based products. This has further implications for designing mechanisms to mitigate the prevalence of red meat-associated diseases (e.g., diabetes, cardiovascular disease, obesity, and certain cancers) and aligns with environmental policy goals of greenhouse gas (GHG) reduction.