The Economic and Welfare Effects of Food Waste Reduction on a Food-Production-Driven Rural Region

Aino Friman and Nina Hyytiä
Additional contact information
Aino Friman: Department of Economics and Management, University of Helsinki, 00014 Helsinki, Finland
Nina Hyytiä: Department of Economics and Management, University of Helsinki, 00014 Helsinki, Finland

Sustainability, 2022, vol. 14, issue 6, 1-18

Abstract: Food waste is economically and ecologically unsustainable; the benefits of food waste reduction are indisputable. Yet knowledge of the economic trade-offs and knock-on effects of such reduction is deficient. This study examines the economic effects of food waste reduction in a rural region that is a nationally important producer of agricultural and food products in Finland. We built a detailed social accounting matrix to trace the transactions among the economic agents. Five different simulations of food waste reduction were run by applying a computable general equilibrium model. In the simulations, households and food services halved their food waste. The results indicated that food waste reduction is economically worthwhile in terms of regional investments and gross domestic product at market prices. However, the reduction induced economic trade-offs and welfare redistribution. The value added to the agriculture and food industries and the welfare of agricultural households decreased, albeit that the simulated compensations alleviated the effects. In the long run, falling agricultural wages and factor incomes entail closedowns and, finally, decrease local food production. This aspect is worth considering in terms of policy planning under the principle of just transition of the European Green Deal.

Keywords: food waste; consumption; computable general equilibrium; food policy; rural economy; agriculture; food services (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2071-1050/14/6/3632/pdf (application/pdf)
https://www.mdpi.com/2071-1050/14/6/3632/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:14:y:2022:i:6:p:3632-:d:775074

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().