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Tracing The Costs And Benefits Of Improvements In Food Safety: The Case Of Hazard Analysis And Critical Control Point Program For Meat And Poultry

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Author Info

  • Golan, Elise H.
  • Vogel, Stephen J.
  • Frenzen, Paul D.
  • Ralston, Katherine L.

Abstract

The level and distribution of the costs and benefits of the Hazard Analysis and Critical Control Point (HACCP) regulatory program for meat and poultry change dramatically once economywide effects are included in the analysis. Using a Social Accounting Matrix Model, we find that reduced premature deaths had a strong positive effect on household income, with economywide benefits almost double initial benefits. Contrary to expectations, reduced medical expenses resulted in a decrease in household income, while HACCP costs resulted in an increase. Net economywide benefits were slightly larger than initial net benefits, with poor households receiving a proportionally smaller share of the increased benefits than nonpoor because of their weak ties to the economy. Our SAM analysis provides policymakers useful information about who ultimately benefits from reduced foodborne illnesses and who ultimately pays the costs of food safety regulation. This analysis also sheds light on a number of issues central to cost-benefit analysis involving health, highlighting the danger of equating changes in income with changes in well-being.

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File URL: http://purl.umn.edu/34023
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Bibliographic Info

Paper provided by United States Department of Agriculture, Economic Research Service in its series Agricultural Economics Reports with number 34023.

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Date of creation: 2000
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Handle: RePEc:ags:uerser:34023

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Related research

Keywords: Food safety; foodborne illness; HACCP; Social Accounting Matrix; Food Consumption/Nutrition/Food Safety; Livestock Production/Industries;

References

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  1. Selma J. Mushkin, 1962. "Health as an Investment," Journal of Political Economy, University of Chicago Press, vol. 70, pages 129.
  2. Crutchfield, Stephen R. & Buzby, Jean C. & Roberts, Tanya & Ollinger, Michael & Lin, Chung-Tung Jordan, 1997. "Economic Assessment of Food Safety Regulations: The New Approach to Meat and Poultry Inspection," Agricultural Economics Reports 34009, United States Department of Agriculture, Economic Research Service.
  3. Jensen, Helen H. & Unnevehr, Laurian J. & Gomez, Miguel I., 1998. "Costs Of Improving Food Safety In The Meat Sector," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 30(01), July.
  4. Buzby, Jean C. & Roberts, Tanya & Lin, Chung-Tung Jordan & MacDonald, James M., 1996. "Bacterial Foodborne Disease: Medical Costs and Productivity Losses," Agricultural Economics Reports 33991, United States Department of Agriculture, Economic Research Service.
  5. Kuchler, Fred & Golan, Elise H., 1999. "Assigning Values To Life: Comparing Methods For Valuing Health Risks," Agricultural Economics Reports 34037, United States Department of Agriculture, Economic Research Service.
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Cited by:
  1. Ragona, Maddalena & Mazzocchi, Mario, 2008. "Measuring the Impacts of Food Safety Regulations: A Methodological Review," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43864, European Association of Agricultural Economists.
  2. Lippert, Christian, 2002. "Zur Ökonomik der Kontrollmaßnahmen bei Lebensmitteln und Futtermitteln," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 51(3).
  3. Jayasinghe-Mudalige, Udith K. & Henson, Spencer J., 2004. "Quantifying The Impact Of Economic Incentives On Firms' Food Safety Responsiveness: The Case Of Red Meat And Poultry Processing Sector In Canada," 2004 Annual meeting, August 1-4, Denver, CO 20419, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  4. Romano, Donato & Cavicchi, Alessio & Rocchi, Benedetto & Stefani, Gianluca, 2004. "Costs and Benefits of Compliance for HACCP Regulation in the Italian Meat and Dairy Sector," 84th Seminar, February 8-11, 2004, Zeist, The Netherlands 24983, European Association of Agricultural Economists.
  5. Spencer Henson, 2003. "The Economics of Food Safety in Developing Countries," Working Papers 03-19, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).

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