Information exposure and economic losses during food safety outbreaks: Evidence from onion markets and Google Trends

Before 2020, fresh onions were rarely associated with major foodborne illness outbreaks in the United States. However, two major multistate outbreaks in 2020 and 2021 resulted in over 2000 reported illnesses and substantial economic losses. This study examined consumer and market responses to onion-related foodborne outbreaks occurring between 2017 and 2021, using household panel and retail scanner data through May 2022. We introduced Google Trends to measure information-seeking behavior, which under the proportionality assumption proxies for state-level information exposure. Using a Heckman selection framework, we decomposed demand shifts into direct outbreak effects (raising population mean risk perceptions) and information-moderated adjustments, with higher information exposure considerably reducing demand losses during outbreaks. Household onion purchases decreased by 20.37% in 2020 and 27.14% in 2021, while earlier outbreaks (2017–2019) showed no significant demand effects. Revenue losses totaled $1.158 billion in 2020 and $1.346 billion in 2021, surpassing even the estimated upper bound of the annual U.S. health burden from all onion-related Salmonella cases ($680 million). These indirect losses were 25–100 times greater than direct recall costs ($46.88 million in 2020, $13.64 million in 2021). Producers absorbed nearly all losses in 2020 amid stable prices (-1.94%), while consumers bore an additional $201 million through 5.56% price increases in 2021. Retail assortment stayed constant (-1.04% and -0.05%) throughout both outbreaks, indicating that observed reductions in purchases were primarily demand-driven rather than supply-constrained. These results reveal a policy trade-off: early outbreak warnings reduce illness but trigger broad consumption losses when sources remain unclear. We recommend real-time Google Trends monitoring for targeted communication and producer burden-sharing mechanisms. • Higher information-seeking (Google Trends) moderated risk-driven demand losses, with variation across states. • Purchases fell 20.4% (2020), 27.1% (2021); stable assortment shows demand-driven drop. • Market losses ($2.5B combined) exceeded $680M estimated annual Salmonella health burden. • Producers bore nearly all 2020 losses ($1.16B); 2021 shifted $201M to consumers. • Timely, targeted communication and GT-based monitoring can reduce economic disruption; producer risk-sharing mechanisms are needed.