Food Safety
Foodborne Illness
An Online Cost Calculator for Estimating the Economic Cost of Illness Due to Shiga Toxin-Producing E. coli (STEC) O157 Infections—Shiga toxin-producing E. coli (STEC) O157 is a significant cause of foodborne illness in the United States. ERS estimated the economic cost of illness due to this pathogen—$405.2 million (in 2003 dollars)—using the most recent estimate (1997) of the annual number of STEC O157 cases by the Centers for Disease Control and Prevention (CDC) and medical and cost data from the Foodborne Diseases Active Surveillance Network (September 2007).
A Web-Based Tool for Calculating the Cost of Foodborne Illness—The ERS Foodborne Illness Cost Calculator can be used to estimate the economic cost of illness due to Shiga toxin-producing E. coli (STEC) O157 infections (June 2006).
Economic Cost of Illness Due to Escherichia coli O157 Infections in the United States —This article describes the updated ERS estimate of the economic cost of illness due to STEC O157 (formerly called Escherichia coli O157) (August 2005).
Deaths due to Unknown Foodborne Agents—This article describes ERS’s review of the evidence on unknown pathogenic agents in food, which have been estimated to cause 3,400 deaths per year in the United States (September 2004).
Valuing the Health Benefits of Food Safety: A Proceedings—Federal agencies use different methods to estimate the costs of illness, so it is difficult to compare programs across agencies. In order to begin developing a common approach, several agencies including ERS organized a conference on valuing the health benefits of food safety at the University of Maryland, College Park, Maryland in September 2000 (April 2001).
Food Safety Efforts Accelerate in the 1990's—This report contains a table with the details of the costs for five foodborne pathogens. The public health human illness costs total $6.9 billion annually (September-December 2000).
Salmonella Cost Estimate Updated Using FoodNet Data—The ERS estimate of the economic cost of illness due to Salmonella infections was updated using new data sources, including information from the FoodNet Foodborne Diseases Active Surveillance Network (May-August 1999).
Estimated Annual Costs of Campylobacter-Associated Guillain-Barré Syndrome—Campylobacter appears to be an important cause of Guillain-Barré syndrome (GBS), a rare form of temporary paralysis. This report describes how ERS estimated the annual costs of GBS due to foodborne Campylobacter infections (July 1997).
Bacterial Foodborne Disease: Medical Costs and Productivity Losses—This report describes how ERS originally estimated the costs of illness due to six bacterial pathogens, using disease outcome trees and the available information about the medical consequences of each type of infection (August 1996).
Markets, Regulation, and Innovation
The Interplay of Regulation and Marketing Incentives in Providing Food Safety—This report examines the effects of mandatory process regulations and management-determined
actions on Salmonella species under the Pathogen Reduction/Hazard Analysis and Critical Control Point (PR/HACCP) rule. The current level of food safety found in U.S. meat and poultry food products is a result of Government regulations (process and performance standards such as sanitation) and management-determined actions (such as capital investment). Using the share of samples testing positive for Salmonella species as a measure of food safety process control in meat and poultry processing plants, the study found that management-determined actions account for about two-thirds of the reduction in samples testing positive for Salmonella species, while process regulations account for about a third of the reduction. The importance of process regulation varies, but accounts for 50 percent or more of process control in about a quarter of plants, and in some plants accounts for the entire process control system.
Imports From China and Food Safety Issues—The U.S. Food and Drug Administration’s (FDA) increased attention to food imports from China is an indicator of safety concerns, as food imports from China more than tripled in value between 2001 and 2008. Addressing safety risks associated with these imports is difficult because of the vast array of products from China, China’s weak enforcement of food safety standards, its heavy use of agricultural chemicals, and its considerable environmental pollution. FDA import refusal data highlight food safety problems that appear to recur in trade and where FDA has focused its import alerts and monitoring efforts. Recurring problems include “filth,” unsafe additives, labeling (typically introduced in food processing and handling), and veterinary drug residues in fish and shellfish (introduced at the farm). Monitoring such a wide range of products for the different hazards that can arise at varying points in the supply chain is a difficult challenge for Chinese and U.S. officials. See “Imports From China and Food Safety Issues” (July 2009).
 Food Safety and Imports: An Analysis of FDA Import Refusal Reports—ERS examined U.S. Food and Drug Administration (FDA) data on import refusals of food into the United States from 1998 to 2004. This report found that import refusals highlight food safety problems in trade and where the FDA has focused its import alerts, examinations, and other monitoring efforts. Some food industries and types of violations may be consistent sources of problems both over time and compared with previous studies. The most violations were found in the vegetable industry (20.6 percent of total violations), fishery and seafood industry (20.1 percent), and fruit industry (11.7 percent). These violations include sanitary issues in seafood and fruit products, pesticides in vegetables, and unregistered processes for canned food products in all three industries (September 2008). An Amber Waves article is based on this study. See “Adulteration Accounts for Majority of FDA Food-Related Import Refusals.”
Outbreak Linked to Spinach Forces Reassessment of Food Safety Practices—While the risk of contracting a foodborne illness from eating spinach is low, spinach and leafy greens have been associated with numerous outbreaks due to contamination with E. coli O157:H7. The 2006 outbreak linked to spinach forced the California spinach and the broader leafy green industry to consider new approaches to food safety (June 2007).
New Food Safety Incentives and Regulatory, Technological, and Organizational Innovations—In a one-day workshop at the 2006 American Agricultural Economics Association (AAEA) annual meeting, presentations covered industry actions, innovations in the private and public sectors, and applied case studies of food safety innovations from around the world (2006).
Did BSE Announcements Reduce Beef Purchases?—This study examines retail purchases of beef and beef products to see if consumers responded to the 2003 U.S. government announcements that North American cows had been infected with Bovine Spongiform Encephalopathy (BSE). Food purchase patterns following the BSE announcements varied across beef products but were limited to no more than 2 weeks in all cases (December 2006).
“Food Safety Improvements Underway in China”—Adverse publicity about contaminated food exports and growing domestic concerns have prompted China to improve overall food safety (November 2006).
“Where Should the Money Go? Aligning Policies with Preferences”—Budget constraints force policymakers to choose which programs to fund, even when human health and safety are at risk. New Federal guidelines emphasize tallying health outcomes to help decide among programs (June 2006).
“New Pathogen Tests Trigger Food Safety Innovations”—Technological advances in the science of pathogen testing are changing the economics of food safety. The increased demand for pathogen testing that began in the early 1990s is being matched by an increased supply of sophisticated testing systems. Information provided by these tests has enabled the food industry to improve food production systems and the safety of food (February 2006).
A set of papers in Choices explores the central role of information in food safety decisionmaking. The interrelationship between regulations and markets in creating economic incentives to control foodborne pathogens is investigated. The papers examine the economic impact of mandated restaurant hygiene grade cards, food safety innovations, BSE in the United States, supply chain contracts, and co-regulation in the United Kingdom (2nd Quarter 2005).
The Economics of Food Safety: The Case of Green Onions and Hepatitis A Outbreaks—Using the example of hepatitis A outbreaks in the United States associated with green onions from Mexico, this report examines the economics of food safety. It reviews the incentives to adopt additional food safety practices and the economic impact of an outbreak on green onion growers in Mexico (December 2004).
 Meat and Poultry Plants' Food Safety Investments: Survey Findings—Results from the first national survey of the types and amounts of food safety investments made by meat and poultry slaughter and processing plants since the late 1990s (ERS survey) provide evidence that market forces have worked in conjunction with regulation to promote the use of more sophisticated food safety technologies. From 1996 through 2000, U.S. plants as a group spent about $380 million annually and made $570 million in long-term investments to comply with USDA's 1996 pathogen reduction/hazard analysis critical control point (PR/HACCP) regulation, according to a survey initiated by the Economic Research Service. The U.S. meat and poultry industry as a whole during the same period spent an additional $360 million on food safety investments that were not required by the PR/HACCP rule (May 2004).
Food Safety Innovation in the United States: Evidence from the Meat Industry—Recent industry innovations improving the safety of the Nation's meat supply range from new pathogen tests, high-tech equipment, and supply chain management systems, to new surveillance networks. Despite these and other improvements, the market incentives that motivate private firms to invest in innovation seem to be fairly weak. Results from an ERS survey of U.S. meat and poultry slaughter and processing plants and two case studies of innovation in the U.S. beef industry reveal that the industry has developed a number of mechanisms to overcome that weakness and to stimulate investment in food safety innovation. The report's findings are summarized in a two-page Research Brief and a related Amber Waves article, “Savvy Buyers Spur Food Safety Innovations in Meat Processing.” (April 2004).
Traceability in the U.S. Food Supply: Economic Theory and Industry Studies—This report describes the results of an investigation into the amount, type, and adequacy of traceability systems in the United States, focusing on the fresh-produce, grains-and-oilseeds, and cattle/beef sectors. Research is based on market studies literature, interviews with industry experts, and on-site interviews with owners, plant supervisors, and/or quality control managers in fruit and vegetable packing and processing plants; beef slaughter plants; grain elevators, mills, and food manufacturing plants; and food distribution centers (March 2004).
Response to U.S. Foodborne Illness Outbreaks Associated with Imported Produce— International Trade and Food Safety: Economic Theory and Case Studies. This report examines how U.S. and other nations responded to foodborne illness outbreaks traced to internationally-traded food (February 2004).
Managing for Safer Food: The Economics of Sanitation and Process Controls in Meat and Poultry Plants—This study evaluates the costs of sanitation and process control in producing meat and poultry. The costs of sanitation and process control as required by the Pathogen Reduction/Hazard Analysis and Critical Control Point (PR/HACCP) rule of 1996 were found to raise wholesale meat and poultry prices by about 1 percent. Weighing Incentives for Food Safety in Meat and Poultry, in the April 2003 issue of Amber Waves highlights these findings, showing how more stringent regulation and changes in the marketplace have improved food safety, despite the rise in meat and poultry recalls (April 2003).
Product Liability and Microbial Foodborne Illness—This report examines how product liability law treats personal injuries attributed to microbially contaminated foods. The risk of lawsuits and the resulting court-awarded compensation may create economic incentives for firms to produce safer food. It is not known how many consumers seek compensation for damages from contaminated foods because information about complaints and legal claims involving foodborne illness is not readily accessible. From a review of 175 jury trial outcomes involving foodborne pathogens, the report identifies factors that influence trial outcomes, while noting that plaintiffs’ awards tend to be modest (May 2001).
 Probabilistic Risk Assessment and Slaughterhouse Practices: Modelling Contamination Process Control in Beef Destined for Hamburger—This paper uses Probabilistic Risk Assessment to model four beef slaughterhouse practices in which alternative pathogen-control approaches were employed. In the model, improvements in
hide removal make the most important contributions to reducing the risk of E. coli contamination in cattle slaughter plants.
(See Roberts, Tanya, Scott A. Malcolm, and Clare A. Narrod. “Probabilistic Risk Assessment and Slaughterhouse Practices: Modelling Contamination Process Control in Beef Destined for Hamburger,” Probabilistic Safety Assessment PSA '99: Risk-Informed Performance-Based Regulation in the New Millennium, Mohammad Modarres, ed., pp. 809-815) (1999).
Restaurants are the chief target of foodborne illness lawsuits—Nearly a third of foodborne-illness lawsuits tracked by ERS from 1988-97 targeted restaurants as the source of the food contamination. The second largest category of defendants was “parent companies.” The median award to winning plaintiffs was $25,560, while a few much higher awards raised the mean to $133,280 (in 1998 dollars) (May 2001).
Economic Assessment of Food Safety Regulations: The New Approach to Meat and Poultry Inspection—This benefit/cost evaluation of reducing foodborne illness by requiring meat and poultry plants to use hazard analysis and critical control points (HACCP) systems finds that the benefits of HACCP outweigh its costs by a substantial margin (July 1997).
Tracking Foodborne Pathogens from Farm to Table: Data Needs to Evaluate Control Options—Proceedings from the January 9-10, 1995 conference in Washington, DC, held by members of Regional Research Project NE-165, a group of more than 70 economists at landgrant universities and government agencies conducting research on the food system. Topics included human foodborne disease, susceptibility, and food consumption data; tracking foodborne pathogen data from farm to retail; integrating data for risk management; and a policy roundtable discussion about how food safety data and analysis can help in program and policy design (December 1995).
Consumer Demand and Behavior
The Effects of Avian Influenza News on Consumer Purchasing Behavior: A Case Study of Italian Consumers’ Retail Purchases—How does information about potential health hazards influence food demand? ERS researchers used Italy as a case study to examine consumers’ responses to newspaper articles on avian influenza (bird flu) from October 2004, after reports of the first outbreaks in Southeast Asia, through October 2006, beyond the point at which outbreaks were reported in Western Europe. Larger numbers of newspaper reports on bird flu led to larger reductions in poultry purchases. Most impacts were of limited duration, and all began to diminish within 5 weeks (August 2008).
 Consumer Perceptions of Safety Critical for Food Imports—Highly publicized international food safety incidents may change consumer perceptions about food safety and consumers' food purchasing patterns. In some instances where the public outcry has been particularly strong, there have been changes in government regulations affecting domestic and/or imported food products. Even after a problem has been resolved regarding the safety of an imported food, consumer perceptions about the implicated food product and about the exporting country's ability to produce safe food may be slow to change, and these perceptions may have a lasting influence on food demand and global trade (November 2003).
Consumer Food Safety Behavior: A Case Study in Hamburger Cooking and Ordering—Americans are eating their hamburgers more well-done than in the past, reducing the risk of E. coli O157:H7 infection by 4.6 percent and reducimg associated medical costs and productivity losses by $7.4 million annually. In a 1996 survey, respondents who were more concerned about the risk of foodborne illness cooked and ordered hamburgers more well-done than those who were less concerned. However, respondents who strongly preferred hamburgers rare or medium-rare continued to cook and order them that way, even if they were aware of the risk (July 2002).
Safe Handling Labels for Meat and Poultry: A Case Study in Information Policy—In 1994, USDA's Food Safety and Inspection Service (FSIS) began requiring safe handling labels for all packages of raw meat and poultry. This case study reviews the economic rationale for such a regulation and summarizes the available data on the success of the regulation. Labels serve both the public health goal of reducing foodborne illness as well as the informational goal of allowing consumers to take informed risks if they choose not to follow safe handling instructions. (See Ralston, Katherine L. and C.T. Jordan Lin. “Safe Handling Labels on Meat and Poultry: A Case Study in Information Policy,” Consumer Interests Annual, vol. 47, pp. 1-8) (2001).
Dissecting the Challenges of Mad Cow & Foot-and-Mouth Disease—The simultaneous presence of bovine spongiform encephalopathy disease and foot-and-mouth disease in the UK in 2001 caused confusion among consumers worldwide about these diseases and their interrelationships. This article summarizes the differences and similarities between the two diseases and presents some estimated economic impacts and implications (August 2001).
 Awareness of Risks Changing How Hamburgers Are Cooked—More Americans are eating their hamburgers more thoroughly cooked, partly due to greater awareness of the health risks of eating undercooked meat. The change in behavior means $7.4 million lower medical costs and productivity losses annually due to E. coli O157:H7 infection alone, as well as other foodborne illnesses associated with rare and medium rare hamburger (May-August 2000).
Consumer Acceptance of Irradiated Meat and Poultry Products—ERS researchers found that a fourth of survey respondents were willing to pay a premium for irradiated ground beef or chicken, which cost more to produce than comparable non-irradiated products. These findings suggest that food irradiation will have a limited impact on public health unless consumer preferences change, perhaps in response to educational messages about the safety and benefits of food irradiation (August 2000).
Demand for Organic and Conventional Frozen Vegetables—Compares the market shares and prices of organic and conventional frozen vegetables (broccoli, green beans, green peas, and sweet corn) using national supermarket scanner data for 1990-96. Price and expenditure elasticities are estimated using the almost ideal demand system (1998).
Demand for Frozen Vegetables: A Comparison of Organic and Conventional Products (text only; the special article is toward the back of the report)—Presents analysis on sales growth, market share, and price premia of organic frozen broccoli, green beans, green peas, sweet corn, and french fries as compared with their conventional counterparts (November 1998).
Labeling and Traceability
Food Traceability: One Ingredient in a Safe and Efficient Food Supply—Food traceability is one element of any supply-management or quality/safety control system. Food producers have voluntarily built traceability systems to track the grain in a cereal box to the farm and the apples in a vat of apple juice to the orchard (April 2004).
Country-of-Origin Labeling: Theory and Observation—This report examines the economic rationale behind various claims about the effects of mandatory country-of-origin labeling. Profits motivate firms to innovate and introduce thousands of new food products each year to satisfy consumers' demand. Yet food suppliers have generally not emphasized, advertised, or labeled food with “Made in USA.” The infrequency of “Made in USA” labels on food suggests suppliers do not believe domestic origin is an attribute that can attract much consumer interest. ERS researchers found that suppliers would be able to provide such labels if there were sufficient consumer interest (January 2004).
“Traceability for Food Safety and Quality Assurance: Mandatory Systems Miss the Mark”—Policymakers have recently started weighing the usefulness of mandatory traceability for managing
diverse problems such as the threat of bio-terrorism, country-of-origin labelling, mad cow
disease, and identification of genetically engineered foods. The question
is: when is mandatory traceability a useful and appropriate policy choice? (See Golan, Elise, Barry Krissoff, Fred Kuchler, Kenneth Nelson, Gregory Price, and Linda Calvin. “Traceability for Food Safety and Quality Assurance: Mandatory Systems Miss the Mark,” Current: A Journal of the Canadian Agricultural Economics Society, no. 4, pp. 27-35 (2003).
 Traceability in the US Food Supply: Deadend or Superhighway?—Although the United States does not mandate system-wide traceability, firms have a number of motives for establishing traceability systems; as a result, private-sector traceability systems in the United States are extensive. The breadth, depth, and precision of private traceability systems vary depending on the attributes of interest and each firm's traceability costs and benefits. Mandatory traceability that fails to allow for variation across firms may impose unnecessary costs on firms already operating efficient traceability systems (2003).
Traceability for Food Marketing and Food Safety: What's the Next Step?—Traceability systems are recordkeeping systems that are primarily used to help keep foods with different attributes separate from one another. When information about a particular attribute of a food product is systematically recorded from creation through marketing, traceability for that attribute is established. This article examines the economic rationale for private firms to establish traceability and the economic arguments for government-mandated traceability (February 2002).
Economics of Food Labeling—This report traces the economic theory behind food labeling and presents three case studies in which the government has intervened in labeling and two examples in which government intervention has been proposed. Economic theory suggests that the appropriate role for government in labeling depends on the type of information involved and the level and distribution of the costs and benefits of providing that information (January 2001).
Bovine Spongiform Encephalopathy (BSE)
Did BSE Announcements Reduce Beef Purchases?—Consumers' retail purchases of beef and beef products were examined for evidence that consumers responded to the 2003 U.S. Government announcements of cows infected with bovine spongiform encephalopathy (BSE). ERS researchers constructed weekly estimates of quantities of beef products consumers purchased from 1998 through 2004 using Nielsen Homescan data. While the variance in purchases was large, most could be explained by trend and seasonality. Deviations from established purchase patterns following the BSE announcements varied across beef products, but were limited to no more than 2 weeks in all cases (December 2006).
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