Valuing Private Sector Incentives to Invest in Food Protection Measures in the Milk and Green Onion Sectors

Andrew Lewis, William Nganje, Jeremy W. Mattson, Dragan Miljkovic and William Wilson

No 7630, Agribusiness & Applied Economics Report from North Dakota State University, Department of Agribusiness and Applied Economics

Abstract: This study provides a framework to value investment strategies to mitigate possible agro-terrorism occurrences in the food supply chain and to determine where these investments would reduce the most risk. This framework is applied to two food sectors that could be at risk: milk and green onions. Stochastic optimization is used to determine the costs and risk premiums of alternative tracking strategies. The real options method along with a portfolio of options, also referred to as the "tomato garden" framework, is used to determine where and when alternative intervention strategies should be implemented to reduce the most risk. Finally, policy implications are derived on the cost-risk tradeoffs, probability of attacks, and containment efforts if there is an attack by using game theory to determine the incentives needed to motivate participants in the milk and green onion supply chains to invest in security measures.

Keywords: Food; Consumption/Nutrition/Food; Safety (search for similar items in EconPapers)
Pages: 33
Date: 2007
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/7630/files/aer620.pdf (application/pdf)

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:ags:nddaae:7630

DOI: 10.22004/ag.econ.7630

Access Statistics for this paper

More papers in Agribusiness & Applied Economics Report from North Dakota State University, Department of Agribusiness and Applied Economics Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().