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Agrifood safety standards, market power and consumer misperceptions


  • Giraud-Heraud, Eric
  • Grazia, Cristina
  • Hammoudi, Abdelhakim


This paper analyzes how the implementation of a food safety standard affects firms strategic behaviour within the context of a food chain. We provide a formal analysis, which considers that the sanitary risk results from a strong heterogeneity of upstream production conditions and the final demand depends on consumers risk estimations (given that consumers may underestimate or, conversely, overestimate the sanitary risk). We show how downstream (processing or retailing) firms may be prompted to play a positive role with respect to food safety, either by selecting only the safest upstream producers or by encouraging the improvement of suppliers production conditions. When the degree of consumers risk misperception is relatively low, then a downstream firm may adopt the latter strategy and increase the marketed quantities as the food safety standard is improved. However, we show that the actual contamination risk is not necessarily decreasing in the level of the food safety standard.

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  • Giraud-Heraud, Eric & Grazia, Cristina & Hammoudi, Abdelhakim, 2007. "Agrifood safety standards, market power and consumer misperceptions," 105th Seminar, March 8-10, 2007, Bologna, Italy 7849, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa105:7849

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    References listed on IDEAS

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    Cited by:

    1. Russo, Carlo & Perito, Maria Angela & Di Fonzo, Antonella, 2011. "Our products are safe (don't tell anyone!). Why don't supermarkets advertise their private food safety standards?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 115987, European Association of Agricultural Economists.
    2. Cristina Grazia & Abdelhakim Hammoudi & Oualid Hamza, 2012. "Sanitary and phytosanitary standards: Does consumers’ health protection justify developing countries’ producers’ exclusion?," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 93(2), pages 145-170.
    3. Russo, Carlo & Perito, Maria Angela & Di Fonzo, Antonella, 2014. "Using Private Food Safety Standards to Manage Complexity: A Moral Hazard Perspective," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 15(2), June.
    4. Perito, Maria Angela & Hammoudi, Abdelhakim, 4. "Food safety standards and their impact on the small farms of developed countries," Politica Agricola Internazionale - International Agricultural Policy, Edizioni L’Informatore Agrario, issue 4.
    5. Russo, Carlo & Perito, Maria Angel & Di Fonzo, Antonella, 2014. "The Strategic Use of Private Food Safety Standards to Manage Complexity: a Moral Hazard Perspective," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182795, European Association of Agricultural Economists.


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