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No Such Thing as a Free Safe Lunch: The Cost of Food Safety Regulation in the Meat Industry
Author(s) -
Antle John M.
Publication year - 2000
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/0002-9092.00027
Subject(s) - food safety , endogeneity , food industry , product (mathematics) , production (economics) , agricultural economics , economics , business , agricultural science , food science , microeconomics , econometrics , environmental science , biology , mathematics , geometry
This study develops theoretical and econometric cost function models for the meat industry to test the hypothesis of safety exogeneity , i.e., that product safety does not affect productive efficiency. Using plant‐level data from the Census of Manufactures, this hypothesis is rejected. Estimates of the impacts of food safety regulation on variable cost of production in the beef, pork, and poultry industries show that the efficiency costs of food safety regulations could plausibly exceed benefits estimated by the U.S. Department of Agriculture. Costs of regulation per pound of meat are found to be size neutral for all but the smallest plants.