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How Should Food Safety Certification be Financed?

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  • John M. Crespi
  • St)phan Marette

Abstract

An analytical framework where consumers are imperfectly informed about the safety of products is used to investigate the welfare effects of a public certification system. Several certification fees under alternative structures of certification cost are analyzed. By maintaining competition among numerous sellers, voluntary certification financed by a per-unit fee is efficient (and sufficient) to signal product safety. However, mandatory certification linked with a fixed user fee may be necessary if a seller wields monopoly power. Further, certification by a single, private agency results in a distorted fee. Copyright 2001, Oxford University Press.

Suggested Citation

  • John M. Crespi & St)phan Marette, 2001. "How Should Food Safety Certification be Financed?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 852-861.
    • Handle: RePEc:oup:ajagec:v:83:y:2001:i:4:p:852-861
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    File URL: http://hdl.handle.net/10.1111/0002-9092.00214
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