Information, Incentives, and Government Intervention for Food Safety

Foodborne illnesses are an important health issue throughout the world. Food safety incidents cause significant economic losses in a multitude of ways, including discomfort, pain, loss in productivity, and death. This review examines issues in the economics of food safety. We first discuss the analysis of costs and benefits of food safety intervention and their usefulness in guiding policy making, and then look into the information problems that dampen the market incentives for the provision of food safety. Building on this discussion, we examine how a government can intervene in food safety either through direct intervention or by increasing the incentives for firms to supply safe food and then look briefly into private initiatives in food safety. We conclude by inviting new research that exploits new estimation techniques and newly available data.