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Economic Impacts Of Mandated Grading And Testing To Avoid A Negative Food Safety Event: Ex Ante Analysis Of The Federal Marketing Order For Pistachios

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  • Gray, Richard S.
  • Sumner, Daniel A.
  • Alston, Julian M.
  • Brunke, Henrich

Abstract

The California pistachio industry led an initiative to establish a federal marketing order, which mandates quality standards and an inspection program to assure food safety and consistency in the quality of California pistachios. We develop a stochastic dynamic simulation model of the pistachio market to investigate quantitatively the likely effects of such collective action enforced by government mandates. Simulation results indicate that, across the full range of parameters used in the analysis, the benefit-cost analysis was always favorable to the proposed policy. The measured benefits to producers, the nation, or the world always well exceeded the corresponding measure of costs, typically by many times.

Suggested Citation

  • Gray, Richard S. & Sumner, Daniel A. & Alston, Julian M. & Brunke, Henrich, 2004. "Economic Impacts Of Mandated Grading And Testing To Avoid A Negative Food Safety Event: Ex Ante Analysis Of The Federal Marketing Order For Pistachios," 2004 Annual meeting, August 1-4, Denver, CO 20031, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20031
    DOI: 10.22004/ag.econ.20031
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    References listed on IDEAS

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    4. Gray, Richard S. & Sumner, Daniel A. & Alston, Julian M. & Brunke, Henrich & Acquaye, Albert K.A., 2005. "Economic Consequences of Mandated Grading and Food Safety Assurance: Ex Ante Analysis of the Federal Marketing Order for California Pistachios," Monographs, University of California, Davis, Giannini Foundation, number 11935, December.
    5. James A. Chalfant & Richard J. Sexton, 2002. "Marketing Orders, Grading Errors, and Price Discrimination," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(1), pages 53-66.
    6. Freebairn, John W., 1973. "The Value Of Information Provided By A Uniform Grading System," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 17(2), pages 1-13, August.
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