IDEAS home Printed from https://ideas.repec.org/a/oup/ajagec/v90y2008i1p15-27.html
   My bibliography  Save this article

Traceability, Liability, and Incentives for Food Safety and Quality

Author

Listed:
  • Sébastien Pouliot
  • Daniel A. Sumner

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.

Suggested Citation

  • Sébastien Pouliot & Daniel A. Sumner, 2008. "Traceability, Liability, and Incentives for Food Safety and Quality," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(1), pages 15-27.
    • Handle: RePEc:oup:ajagec:v:90:y:2008:i:1:p:15-27
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2007.01061.x
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Marcel Boyer & Donatella Porrini, 2004. "Modelling the choice between regulation and liability in terms of social welfare," Canadian Journal of Economics, Canadian Economics Association, vol. 37(3), pages 590-612, August.
    2. Jill E. Hobbs & DeeVon Bailey & David L. Dickinson & Morteza Haghiri, 2005. "Traceability in the Canadian Red Meat Sector: Do Consumers Care?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(1), pages 47-65, March.
    3. Hiriart, Yolande & Martimort, David & Pouyet, Jerome, 2004. "On the optimal use of ex ante regulation and ex post liability," Economics Letters, Elsevier, vol. 84(2), pages 231-235, August.
    4. Hobbs, Jill E., 2004. "Traceability in the Canadian Red Meat Sector," Economic and Market Information 55304, Agriculture and Agri-Food Canada.
    5. Crutchfield, Stephen R. & Roberts, Tanya, 2000. "Food Safety Efforts Accelerate in the 1990's," Food Review/ National Food Review, United States Department of Agriculture, Economic Research Service, vol. 23(3), September.
    6. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
    7. Frenzen, Paul D. & Buzby, Jean C. & Rasco, Barbara, 2001. "Product Liability And Microbial Foodborne Illness," Agricultural Economic Reports 34059, United States Department of Agriculture, Economic Research Service.
    8. Robert D. Cooter, 1991. "Economic Theories of Legal Liability," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 11-30, Summer.
    9. Kolstad, Charles D & Ulen, Thomas S & Johnson, Gary V, 1990. "Ex Post Liability for Harm vs. Ex Ante Safety Regulation: Substitutes or Complements?," American Economic Review, American Economic Association, vol. 80(4), pages 888-901, September.
    10. Steven Shavell & A. Mitchell Polinsky, 2000. "The Economic Theory of Public Enforcement of Law," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 45-76, March.
    11. Brian Roe, 2004. "Optimal Sharing of Foodborne Illness Prevention between Consumers and Industry: The Effect of Regulation and Liability," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(2), pages 359-374.
    12. Golan, Elise H. & Krissoff, Barry & Kuchler, Fred & Calvin, Linda & Nelson, Kenneth E. & Price, Gregory K., 2004. "Traceability In The U.S. Food Supply: Economic Theory And Industry Studies," Agricultural Economic Reports 33939, United States Department of Agriculture, Economic Research Service.
    13. Steven Shavell, 1984. "A Model of the Optimal Use of Liability and Safety Regulation," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 271-280, Summer.
    14. Meuwissen, Miranda P.M. & Velthuis, Annet G.J. & Hogeveen, Henk & Huirne, Ruud B.M., 2003. "Traceability And Certification In Meat Supply Chains," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 21(2), pages 1-15.
    15. Golan, Elise H. & Crissoff, Barry & Kuchler, Fred & Nelson, Kenneth B. & Price, Gregory K. & Calvin, Linda, 2003. "Traceability in the US Food Supply: Dead End or Superhighway?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 18(2), pages 1-4.
    16. Buzby, Jean C. & Frenzen, Paul D., 1999. "Food safety and product liability," Food Policy, Elsevier, vol. 24(6), pages 637-651, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Grajzl, Peter & Baniak, Andrzej, 2009. "Industry self-regulation, subversion of public institutions, and social control of torts," International Review of Law and Economics, Elsevier, vol. 29(4), pages 360-374, December.
    2. Asioli, Daniele & Boecker, Andreas & Canavari, Maurizio, 2012. "Perceived Traceability Costs and Benefits in the Italian Fisheries Supply Chain," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 2(4), pages 1-19, March.
    3. Andrzej Baniak & Peter Grajzl, 2014. "Controlling Product Risks when Consumers are Heterogeneously Overconfident: Producer Liability vs. Minimum Quality Standard Regulation," CESifo Working Paper Series 5003, CESifo.
    4. G.G.A. de Geest & G. Dari Mattiacci, 2005. "Soft Regulators, tough judges," Working Papers 05-06, Utrecht School of Economics.
    5. Giraud-Heraud, Eric & Grazia, Cristina & Hammoudi, Abdelhakim, 2007. "Agrifood safety standards, market power and consumer misperceptions," 105th Seminar, March 8-10, 2007, Bologna, Italy 7849, European Association of Agricultural Economists.
    6. Loureiro, Maria L., 2008. "Liability and food safety provision: Empirical evidence from the US," International Review of Law and Economics, Elsevier, vol. 28(3), pages 204-211, September.
    7. Souza Monteiro, Diogo M. & Caswell, Julie A., 2005. "The Economics of Traceability for Multi-Ingredient Products: A Network Approach," 2005 Annual meeting, July 24-27, Providence, RI 19143, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Marion Desquilbet & Sylvaine Poret, 2014. "How do GM/non GM coexistence regulations affect markets and welfare?," European Journal of Law and Economics, Springer, vol. 37(1), pages 51-82, February.
    9. E. Rouvière & K. Latouche, 2014. "Impact of liability rules on modes of coordination for food safety in supply chains," European Journal of Law and Economics, Springer, vol. 37(1), pages 111-130, February.
    10. Suurmond, Guido, 2007. "The effects of the enforcement strategy," MPRA Paper 21142, University Library of Munich, Germany.
    11. Friehe, Tim & Langlais, Eric, 2015. "On the political economy of public safety investments," International Review of Law and Economics, Elsevier, vol. 41(C), pages 7-16.
    12. Andrzej Baniak & Peter Grajzl, 2016. "Controlling Product Risks when Consumers Are Heterogeneously Overconfident: Producer Liability versus Minimum-Quality-Standard Regulation," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 172(2), pages 274-304, June.
    13. Gérard Mondello, 2022. "Strict liability, scarce generic input and duopoly competition," European Journal of Law and Economics, Springer, vol. 54(3), pages 369-404, December.
    14. Marcel Boyer & Donatella Porrini, 2010. "Optimal liability sharing and court errors: an exploratory analysis," Working Papers hal-00463913, HAL.
    15. Hiriart, Yolande & Martimort, David & Pouyet, Jerome, 2010. "The public management of risk: Separating ex ante and ex post monitors," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 1008-1019, December.
    16. Pierre Bentata & Karim Barkat, 2012. "Environmental Liability and Regulation: An Empirical Study of the French Institutional Division of Labour," CAE Working Papers 98, Aix-Marseille Université, CERGAM.
    17. Jonathan Yoder, 2008. "Liability, Regulation, and Endogenous Risk: The Incidence and Severity of Escaped Prescribed Fires in the United States," Journal of Law and Economics, University of Chicago Press, vol. 51(2), pages 297-325, May.
    18. Boyer, Marcel & Porrini, Donatella, 2011. "The impact of court errors on liability sharing and safety regulation for environmental/industrial accidents," International Review of Law and Economics, Elsevier, vol. 31(1), pages 21-29, March.
    19. Yolande Hiriart & David Martimort & Jérôme Pouyet, 2008. "The Regulator and the Judge : The Optimal Mix in The Control of Environmental Risk," Revue d'économie politique, Dalloz, vol. 118(6), pages 941-967.
    20. Beckmann, Volker & Soregaroli, Claudio & Wesseler, Justus, 2010. "Ex-ante regulation and ex-post liability under uncertainty and irreversibility: governing the coexistence of GM crops," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 4, pages 1-33.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:ajagec:v:90:y:2008:i:1:p:15-27. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.