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Optimal Sharing of Foodborne Illness Prevention between Consumers and Industry: The Effect of Regulation and Liability

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  • Brian Roe

Abstract

Consumers and the food industry can both prevent foodborne illness. Two questions are explored: what is the socially optimal level of preventative effort by each and can tort and regulatory instruments induce such behavior? Analysis is complicated by two aspects of food safety technology: one party's effort can affect the marginal effectiveness of the other party's effort and damage functions can be nonconvex. Previous analysis of accidents under torts and regulation fails to consider these generalizations. Indeed, results concerning the ability of tort and regulatory instruments to induce first-best and second-best behavior often contradict previous results in the literature. Copyright 2004, Oxford University Press.

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  • 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.
    • Handle: RePEc:oup:ajagec:v:86:y:2004:i:2:p:359-374
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    Cited by:

    1. Hussain, Salman, 2006. "Co-regulation and voluntarism in the provision of food safety: lessons from institutional economics," Working Papers 45996, Scotland's Rural College (formerly Scottish Agricultural College), Land Economy & Environment Research Group.
    2. Teisl, Mario F. & Roe, Brian E., 2010. "Consumer willingness-to-pay to reduce the probability of retail foodborne pathogen contamination," Food Policy, Elsevier, vol. 35(6), pages 521-530, December.
    3. Yoder, Jonathan K., 2005. "Liability, Regulation and Endogenous Risk: Incidence and Severity of Escaped Prescribed Fires in the United States," Working Papers 12964, Washington State University, School of Economic Sciences.
    4. 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.
    5. Ochieng’, Brian J. & Hobbs, Jill E., 2016. "Incentives for cattle producers to adopt an E. Coli vaccine: An application of best–worst scaling," Food Policy, Elsevier, vol. 59(C), pages 78-87.
    6. Saak, Alexander E., 2016. "Traceability and reputation in supply chains," International Journal of Production Economics, Elsevier, vol. 177(C), pages 149-162.
    7. Oh, Miyoung, 2014. "Three essays on consumer choices on food," ISU General Staff Papers 201401010800005236, Iowa State University, Department of Economics.
    8. 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.
    9. Rouvière, Elodie, 2016. "Small is beautiful: firm size, prevention and food safety," Food Policy, Elsevier, vol. 63(C), pages 12-22.
    10. 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.
    11. Yuqing Zheng & Chen Zhen & Daniel Dench & James M. Nonnemaker, 2017. "U.S. Demand for Tobacco Products in a System Framework," Health Economics, John Wiley & Sons, Ltd., vol. 26(8), pages 1067-1086, August.
    12. Marette, Stéphan & Roe, Brian E. & Teisl, Mario, 2012. "The welfare impact of food pathogen vaccines," Food Policy, Elsevier, vol. 37(1), pages 86-93.
    13. Oh, Miyoung & Hennessy, David A., 2014. "Upstream and Downstream Strategic Food Safety Interactions," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 174105, Agricultural and Applied Economics Association.
    14. Bhole, Bharat & Wagner, Jeffrey, 2008. "The joint use of regulation and strict liability with multidimensional care and uncertain conviction," International Review of Law and Economics, Elsevier, vol. 28(2), pages 123-132, June.
    15. Bahalou Horeh, Marziyeh & Elbakidze, Levan, 2020. "Economic Efficiency of Food Safety Modernization Act: Preventing Illnesses from Contaminated Water," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304637, Agricultural and Applied Economics Association.

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