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Traceability, Liability, and Incentives for Food Safety and Quality

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  • Pouliot, Sebastien
  • Sumner, Daniel A.

Abstract

Recent food scares such as the discoveries of Bovine Spongiform Encephalopathy and E. coli-contaminated spinach have heightened interest in food traceability. Here, we show how exogenous increases in food traceability create incentives for farms and marketing firms to supply safer food by increasing liability costs. We model a stylized marketing chain composed of farms, marketers, and consumers. Unsafe food for consumers can be caused by either marketers or farms. We show that food safety declines with the number of farms and marketers and imperfect traceability from consumers to marketers dampens liability incentives to supply safer food by farms. Copyright 2008, Oxford University Press.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Pouliot, Sebastien & Sumner, Daniel A., 2010. "Traceability, Liability, and Incentives for Food Safety and Quality," Staff General Research Papers Archive 32126, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:32126
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