Public Goods, Hysteresis, and Underinvestment in Food Safety

Timothy Richards, William Nganje and Ram N. Acharya

Journal of Agricultural and Resource Economics, 2009, vol. 34, issue 3, 19

Abstract: Despite the economic damage inflicted by a foodborne disease outbreak, firms at all points in the supply chain appear to be reluctant to invest in the necessary food safety technologies and practices. We argue that these investments are subject to both hysteretic and public good effects, and construct a theoretical model of food safety investment, calibrated to describe the 2006 E. coli outbreak in California spinach. Both effects are found to induce delays in food safety investments, but the public good effect dominates. We suggest a number of policy options that improve incentives to contribute to the public good.

Keywords: Food; Security; and; Poverty (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:jlaare:57627

DOI: 10.22004/ag.econ.57627

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