The Economics of Voluntary Traceability in Multi-Ingredient Food Chains

Diogo M. Souza-Monteiro and Julie Caswell ()
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Diogo M. Souza-Monteiro: Kent Business School, University of Kent, Canterbury, Kent CT2 7PE, UK, Postal: Kent Business School, University of Kent, Canterbury, Kent CT2 7PE, UK
Authors registered in the RePEc Author Service: Diogo Monjardino de Souza Monteiro ()

Agribusiness, 2010, vol. 26, issue 1, 122-142

Abstract: The consumption of multi-ingredient foods is increasing across the globe. Traceability can be used as a tool to gather information about and manage food safety risks associated with these types of products. The authors investigate the choice of voluntary traceability in three-tiered multi-ingredient food supply chains. They propose a framework based on vertical control and agency theory to model three dimensions of traceability systems: depth, breadth, and precision. Their analysis has three main results. First, full traceability is feasible as long as there are net benefits to a downstream firm that demands traceability across all ingredients. Second, horizontal network externalities are positive because an increase in the level of traceability in one ingredient requires a similar increase in others. Finally, vertical network effects will be positive insofar as willingness to pay and probabilities of food safety hazards increase. [EconLit Classification: Q130, L140]. © 2010 Wiley Periodicals, Inc.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:26:y:2010:i:1:p:122-142

DOI: 10.1002/agr.20233

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