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Small is Beautiful? Firm's Size, Prevention & Food Safety

  • Rouviere, Elodie
  • Soubeyran, Raphael

The European General Food Law of 2005 and the newly promulgated FDA Food Safety Modernization Act (FFSMA) of 2010 ask all food operators to implement preventive efforts. In this article, we explore the link between firm’s size and preventive efforts. We show two main results. First, when there is no cross-contamination, small firms will provide higher preventive efforts than large firms. When there is crosscontamination, the effort-size curve may have a "inverted-U" shape. From our results we can argue that when implementing or enforcing food safety regulations, public authorities should consider both firms size and food safety hazard.

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File URL: http://purl.umn.edu/123410
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Paper provided by Agricultural and Applied Economics Association in its series 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington with number 123410.

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Date of creation: 14 May 2012
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Handle: RePEc:ags:aaea12:123410
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  1. M. Menegatti, 2008. "Optimal prevention and prudence in a two-period model," Economics Department Working Papers 2008-EP03, Department of Economics, Parma University (Italy).
  2. Sébastien Pouliot & Daniel A. Sumner, 2008. "Traceability, Liability, and Incentives for Food Safety and Quality," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(1), pages 15-27.
  3. Kaïs Dachraoui & Georges Dionne & Louis Eeckhoudt & Philippe Godfroid, 2004. "Comparative Mixed Risk Aversion: Definition and Application to Self-Protection and Willingness to Pay," Journal of Risk and Uncertainty, Springer, vol. 29(3), pages 261-276, December.
  4. Ehrlich, Isaac & Becker, Gary S, 1972. "Market Insurance, Self-Insurance, and Self-Protection," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 623-48, July-Aug..
  5. Elodie Rouviere & Raphael Soubeyran & Céline Bignebat, 2010. "Heterogeneous efforts in voluntary programmes on food safety," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 37(4), pages 479-499, December.
  6. S. Andrew Starbird, 2005. "Moral Hazard, Inspection Policy, and Food Safety," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 15-27.
  7. Pouliot, Sebastien, 2011. "The FDA Food Safety and Modernization Act and the Exemption for Small Firms," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103885, Agricultural and Applied Economics Association.
  8. Starbird, S. Andrew & Amanor-Boadu, Vincent, 2006. "Do Inspection and Traceability Provide Incentives for Food Safety?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 31(01), April.
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