Start Date

7-1-2011 10:30 AM

End Date

7-1-2011 11:45 AM

Track

1. Track 1 – Formal Paper Presentation

Subject Area

Food Service

Faculty Member

Miao, Li (lmiao@purdue.edu) Almanza, Barbara (almanzab@purdue.edu)

Abstract

This study aims to shed light on risk communication practices dealing with restaurant-associated food safety events depending on the type of events; hazard and outrage. Four food safety events associated with two major fast food restaurant chains, Wendy’s and Taco Bell, were examined in terms of their actions dealing with two types of events, E.coli outbreak and outrage events (2X2) by using content analysis and event study methodology (ESM). Content analysis results revealed how differently media covered hazard and outrage cases and ESM results demonstrated the significant impact of the type of events on cumulative abnormal returns. Interestingly, immediate, strong, and negative impact of food safety events on stock price of restaurant firms was detected in a 10-day event window, however, the correlations were attenuated as time goes by regardless of the type of events.

Keywords

Risk communication, restaurant associated food safety event, hazard and outrage, content analysis, event study methodology, media coverage, stock price, Taco bell, Wendy's

Download

Share

COinS
 
Jan 7th, 10:30 AM Jan 7th, 11:45 AM

Risk Communication on Restaurant Associated Food Safety Events: An Examination of Media Coverage of Restaurant-associated Food Safety Events and its Impact on Stock Price of Restaurant Firms

This study aims to shed light on risk communication practices dealing with restaurant-associated food safety events depending on the type of events; hazard and outrage. Four food safety events associated with two major fast food restaurant chains, Wendy’s and Taco Bell, were examined in terms of their actions dealing with two types of events, E.coli outbreak and outrage events (2X2) by using content analysis and event study methodology (ESM). Content analysis results revealed how differently media covered hazard and outrage cases and ESM results demonstrated the significant impact of the type of events on cumulative abnormal returns. Interestingly, immediate, strong, and negative impact of food safety events on stock price of restaurant firms was detected in a 10-day event window, however, the correlations were attenuated as time goes by regardless of the type of events.