Economic Evaluation for Food Safety Regulation : Theoretical Approaches and Case Study

The purpose of this paper is to showcase the process of risk assessment and to present a Risk/Benefit Model for the economic evaluation of food safety regulation. In this study, we classified hazardous materials in food, and introduced the process of risk assessment and the current status of risk assessment in Korea. As the main approaches to measure the social benefit, WTP (Willingness-to-Pay) and COI (Cost-of-Illness) approaches are discussed. Then, we developed a Risk/Benefit Model to evaluate the economic validity of food safety management in Korea: Introducing HACCP (Hazard Analysis and Critical Control Point) in the catering industry to eliminate the risk of food-born diseases. The results of this analysis show that the introduction of HACCP in the catering industry in Korea is economically accepted, and thus this food safety regulation should be performed. The discussion in this paper offers not only a methodology to measure the economic validity of government regulations or programs for food safety, but also an idea for further studies. The Risk/Benefit Model developed in the paper, in particular, might be the starting point for future research measuring economic validity of policies on the food safety management system in Korea.