The public's valuation of food safety - can it contribute to policy?

Abstract

This thesis examines the 'economics of food safety'. The discussion outlines a theoretical 'equilibrium' model of food safety. This is used as a basis for understanding the concept of 'market failure' in the food safety context. Three specific market failures are identified. These are risk perception, information asymmetry and social costs and benefits. It is suggested that the government needs to intervene to correct these market failures. This leads into the main research undertaken as part of the thesis. The core issue is the extent to which government intervention is demanded by the public. The government intervenes through the provision of public goods which in this context is the work undertaken through the Food Standards Agency. To estimate the demand for food safety activities, undertaken by the Agency, it is necessary to elicit the public's willingness to pay for food safety. The thesis uses a stated preference technique, contingent valuation, to try and estimate the demand, and so the willingness to pay for the 'food safety public good'. It is suggested that the technique is most appropriate for the valuation of common cases of food poisoning. Methodological problems still arose with a restricted safety concept. In particular, part-whole bias where the relatively narrow scope of the question was overlooked. Respondents tended to generalise to include, in their valuation of the food safety issue, more serious forms of food safety hazard. The research suggests that public understanding of the food system is vital for the success of such a contingent valuation exercise. However, such knowledge appears to be limited, given respondent's disconnection from farming, food manufacturing and to a lesser extent food retailing. Thus the public's limited knowledge of the food system is a major constraint on the usefulness of contingent valuation in this area.