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This research project will review available information on estimating the benefits associated with policies which reduce the risk of foodborne illness.
Study Duration : July 2003 to December 2003
Contractor : Scottish Agricultural College
One of the main objectives of the Agency, as set out in the Food Standards Act, is to protect the safety of food. It is therefore important for the Agency to gain an overview of the information that is available for estimating the benefits associated with policies to reduce the risk of foodborne illness. This research aim is fully consistent with 'putting the consumer first' as it can provide a better understanding of how consumers would prioritise policy areas. Priorities can be set more consistently if the benefits of reducing risks in different policy areas can be measured and compared to the costs of introducing the policies. The results of the review will give the Agency a better understanding of this literature and of the gaps that would need to be addressed in future.
One important question that will be addressed by the research is whether benefits that were estimated in a non-food context can be applied in the food context. This is called benefit transfer and is important, as few benefit estimation studies have so far been carried out in the food context. Research in transport has estimated the benefits of reducing the risk of fatal road accidents. This estimate can then be compared to the cost of a new scheme to improve road transport. The question for the Agency is whether this figure can be used in the context of a policy which aims to reduce the fatal risk of foodborne illness.
The research will conduct an extensive literature search of both published material and latest conference papers. The research will first focus on the theory behind benefit estimation and will discuss the different methods used. The use and reliability of benefit transfer will then be addressed. Finally, the research will summarise the literature search of benefit estimation studies.
The research provides a short background on the rationale for government intervention in the area of food safety and food standards. This is followed by an extensive discussion of the different methods that can be used to estimate how consumers value the benefits of policies to improve food safety and standards. Finally, the research gives a summary of relevant empirical studies that have attempted to estimate such benefits in the past.
The case for intervention in food safety and food standards is strongest if consumers cannot easily differentiate between products that are of different levels of safety. In this situation of imperfect information, economic theory suggests that the optimum level of intervention is determined by consumers' demand for food safety and by the cost of supplying it.
The cost of providing food safety is likely to rise, if the risk has already been considerably reduced. 'Early wins' can be cheap to introduce but further improvements often require complex technical solutions. On the benefit side, consumers will value a small reduction less if the overall risk has already been reduced to very low levels.
One major problem with finding the optimum level of intervention is the estimation of the value that consumers attach to risk reductions. This study reviewed a number of methods for measuring consumer benefits, including human capital approaches, stated and revealed preference approaches and cost of illness. The benefits and limitations of these methods were discussed.
The study discussed whether the estimates of the benefits that consumers attach to reducing fatal risks can be used by the FSA if the original study was framed in a non-food context (e.g. transport). This could be a way of using a wider range of existing research and is called benefits transfer. The paper cautioned against this method and argued that it should be used with care. In the long term, food-specific studies are needed.
The final part of this research reviewed a large number of benefit estimation studies that are food-related. Such studies have for example estimated the benefits of reducing the risk of salmonella. These are mainly US studies, but give the Agency a better understanding of the existing evidence that is available.
The results of this research will prove valuable to the work of FSA economists, who give economic advice on Regulatory Impact Assessments and on cost-benefit analyses in general. A better understanding of the body of research of direct relevance to the FSA has been gained as a result of this project.
Final report is available from the FSA Library and Information centre.
To obtain a copy, please contact the Enquiry Desk, Dr. Elsie Widdowson Library and Information Services, Food Standards Agency (020 7276 8181/8182 or at
library&info@foodstandards.gsi.gov.uk
).
Contact
: For any enquiries concerning this research project, please contact the relevant Programme contact or email
science@foodstandards.gsi.gov.uk
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