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D03003: Mapping of potential research areas for economic analysis
Friday 23 April 2004
This research project aims to identify research areas where economic analysis can add most value to the research and activities of the Agency.
Study Duration
: October 2003 to January 2004
Contractor
: Imperial College London at Wye
Background
The Economics Research Programme is a new programme in the Agency's research portfolio. Therefore, it is important to identify those areas where economics can add most value to the activities of the Agency. This project will build on the knowledge gaps, which were identified by the literature review.
Research Approach
The research will conduct interviews with a sample of external FSA stakeholders (businesses, trade and consumer organisations, local authorities and other government departments). Interviews will aim to identify economic research that is carried out by stakeholders and areas that stakeholders would like the Agency to fund.
The results of the interviews will be combined with the knowledge gaps identified by the 'Review on the Economics of Food Safety and Food Standards' (project D03002) to give a set of recommendations for prioritising the Economics Research Programme.
Results and findings
A sample of FSA stakeholders was contacted, including industry, consumer and trade organisations and other government departments. Each organisation was asked about the type of economic research that the FSA should be carrying out, based on the gaps that the organisation perceived. On the basis of this consultation exercise, four key areas for economics research were identified:
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Nature, scale and incidence of compliance costs
The FSA is required to produce a large number of Regulatory Impact Assessments (RIA) for which it needs to gain a better understanding of the compliance costs borne by industry. A better understanding is also needed about who within the food chain bears these costs (e.g. small versus large companies). Limited industry feedback about expected compliance costs with new regulations during consultation, suggests that a review of the consultation and RIA process is required to ensure a more extensive and timely involvement of industry. This would make it easier for the FSA to take proportionate decisions.
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Interaction between public and private regulation
Economics can make a significant contribution towards analysing different policy instruments, such as regulation, tort liability, co-regulation, taxation, etc. However, in the area of food safety and standards, private companies and consumers have a private incentive to reduce the risk of food safety incidents, by appropriately handling, preparing and choosing food products. In the UK, there is a high degree of co-ordination within supermarket supply chains with standards often in excess of those set in public regulations. Economics research could therefore analyse this interaction between public and private regulation and identify ways to achieve greater synergies.
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Consumer behaviour and choice
Given the growing interest in food-related health problems there is a need for more research to understand consumer behaviour in relation to food. Economics has a contribution to make in this effort, but a multi-disciplinary approach incorporating economics with, for example, psychology and sociology is also needed.
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Methodology of estimation of the benefits of food safety regulation
Economists from other government departments, who were contacted, faced methodological issues very similar to those faced by FSA economists. One major issue was the estimation of benefits of safety regulations. Willingness to Pay studies had been commissioned by some Departments, but significant gaps remain in this area. Therefore, there is considerable scope for the Economics Research Programme to co-operate with the research efforts of other government departments.
The results and recommendations of this study will be used to decide on the content of the Economics Research Programme in the next few years.
Dissemination information
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
infocentre@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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