Some economic aspects of food safety regulations

Podruzsik, Szilárd – Kasza, Gyula

Keywords: food safety, risks, imperfect markets

Food safety is a special field, where the value of investment may be measured by the incidence of characteristic risks and the effects they cause, although such effects especial the latent ones can only be assessed with exceptional difficulties. A more precise determination of latent effects requires consumer analyses. Social welfare economics and human capital models may serve for the investigation of economic background to food safety. Of these two international practices employ primarily the human capital model because of the easier ways of quantification. The economic effects of diseases traceable to lack of food safety need to be investigated in households, at enterprises and at state (especially in servicing systems) levels. Assessment of the optimal level of regulations may be provided by taking into account perceivable changes due to state intervention. The sum of money spent on the maintenance of state institutions represents the level of regulation, although this can be diversified during the later phases of investigation. This model pays no attention to the indirect effects of food safety problems, such as a slump of internal consumption in the sector or international marketability.

Full article