The Effect of the BSE Outbreak in Japan on Consumers’ Preferences

Abstract

A nonparametric approach was used to test whether there was a structural change in Japanese consumers' demand for meat as a result of the BSE outbreak in the country. The axiom of revealed preference was utilised to test the stability of preferences in Japanese meat consumption. The matrix of the weak form of revealed preference (WARP) was partitioned and Kruskal-Wallis statistics were derived to evaluate whether the preference switches found are transitory or due to a structural change. Empirical results show that Japanese meat demand is currently unstable and has undergone structural change, synchronised with the BSE outbreak in Japan in mid-September 2001.