Media Coverage of PCB Contamination of Farmed Salmon: The Response of U.S. Import Demand

Abstract

This article evaluates the effects of extensive media coverage of a study published in 2004 regarding the presence of polychlorinated biphenyls (PCBs) and other organic contaminates in farmed salmon on U.S. import demand for fresh farmed salmon. The study indicated that levels of PCBs differed according to source, with highest PCB levels found in salmon from Northern Europe and lowest in those from Chile. Using a newspaper article index as a proxy for information, a two-stage demand model is estimated. In the first stage, total U.S. import demand for fresh farmed salmon is estimated to determine the overall effect of the information, while the second stage determines if there were any significant changes in market shares of source countries. Results indicate that imports declined by approximately one-third of what would have been in the absence of the PCB media stories during 2004–2006, and that some changes in exporters’ market shares occurred. Health implications for U.S. seafood consumers are discussed.

Keywords:

• farmed salmon
• imports
• information
• PCB contamination

Notes

Variables to capture the effect of positive news were included in earlier model estimations, in both first and second stages. These were found to have no statistical effect upon farmed salmon demand. The positive news variables were constructed from the same data source, and including information on health benefits from omega-3 s from farmed salmon consumption.