Working papers
Bovay, J. “Shaming, stringency, and shirking: Evidence from food-safety inspections.” [latest version]
Peer-Reviewed Journal Articles
Bovay, J. "Food safety, reputation, and regulation." Applied Economic Perspectives and Policy, forthcoming.
Abstract: This article reviews the empirical economics literature on food safety, reputation, and regulation. Producers have strong private incentives to provide safe food, largely related to reputation, especially the negative demand effects seen in response to food-safety problems. Mandatory disclosure of information about food safety can change demand and improve safety outcomes. Private incentives led producers and marketers to adopt private and collective standards for produce safety prior to the implementation of similar government regulations in the United States. Private and collective standards and government regulations all have distributional effects. The article concludes with some policy suggestions informed by the literature.
Ferrier, P., C. Zhen, and J. Bovay. “Price and Welfare Effects of the Food Safety Modernization Act Produce Safety Rule.” Journal of Agricultural and Resource Economics, forthcoming.
Abstract: Implementation of the U.S. Food Safety Modernization Act (FSMA) Produce Safety Rule is expected to cost about 1.1 percent of revenue for covered farms producing raw and minimally processed fruits and vegetables in the United States. We develop new estimates of the cost of compliance with the rule by commodity and provide new estimates of own- and cross-prices elasticities of demand for 18 fruits and 20 vegetable commodities. These are used as inputs in an equilibrium displacement model that simulates the price and welfare effects of the rule. We find that consumer and farm prices increase by 0.55 and 1.69 percent respectively for fruits and 0.15 and 0.59 percent for vegetables. Costs associated with the rule’s implementation across these commodities are estimated to reduce producer welfare by 0.63 percent for fruits and 0.51 percent for vegetables (as a share of revenue). If the rule’s provisions were instead enacted unilaterally by growers of individual commodities, producer welfare losses would be 0.93 percent of total revenue for fruits and 0.31 percent for vegetables.
Garber, B., J. Alwang, G.W. Norton, and J. Bovay. “Beef and the Bottom Line: The Effect of Value-Added Certification on Feeder Cattle Profitability.” Journal of Agricultural and Applied Economics, forthcoming.
Abstract: Data from 1,422 feeder cattle teleauction lots were used to assess the impacts on profitability of the Virginia quality assured (VQA) feeder cattle program. The analysis finds higher profits for VQA cattle due to their faster turnover and lower feed costs; however, certification does not have a significant effect on price received by producers. The analysis further suggests that the cost associated with production under VQA should be considered in addition to price effects studied in previous literature.
Tian, Y., R. Croog, J. Bovay, A. Concepcion, T. Getchis, and M.R. Kelly. "Who responds to health, environmental, and economic information about local food? Evidence from Connecticut seafood consumers." Aquaculture Economics & Management, forthcoming. [Accepted manuscript]
Abstract: We designed and implemented a discrete choice experiment to assess how information about the health, environmental, and economic benefits of locally produced aquaculture products affect Connecticut consumers’ willingness to pay (WTP) for products produced in the state, as compared with products from another state or another country. We find that information about local economic benefits tended to increase WTP for Connecticut-grown and -raised products, whereas information about health, safety, and the environment tended to decrease WTP for products from other regions. We also explore heterogeneous effects of the information treatments by respondent gender, education, and income.
McFadden, B., J. Bovay, and C. Mullally. "What are the overall implications of rising demand for organic fruits and vegetables? Evidence from theory and simulations". Q Open, https://doi.org/10.1093/qopen/qoab008.
Abstract: US consumers currently eat less fruits and vegetables (FV) than recommended by dietary guidelines. Inadequate FV consumption exists alongside rapid growth in demand for organic FV. Since the viable production area of FV is finite, organic and conventional FV are linked in production while serving as substitutes in consumption. Rising purchases of organic FV may have important implications for prices and quantities consumed in the conventional FV market. In this paper, we analyze the implications of rising demand for organic FV when organic and conventional FV are linked in supply and demand. More specifically, we use a multi-market equilibrium displacement model to examine the impact of rising demand for organic produce on prices and total quantities consumed of conventional and organic FV under two scenarios: product differentiation (i.e. organic versus conventional produce) while assuming that consumers have identical preferences that can be represented by a single market demand function for each good; and product differentiation with segmented markets, which allows for two types of consumers with unique demand functions. Both scenarios were simulated with and without an offsetting shift in demand for conventional FV. Our simulation results indicate that the increasing demand for organic FV may result in decreased consumption of combined conventional and organic FV, and that the direction of changes in FV consumption may vary by consumer segment. Under the most realistic assumptions, when one segment of consumers increases its demand for organic FV, this segment's overall consumption of organic plus conventional FV falls; the other segment's overall consumption rises. We provide sensitivity analyses and discuss caveats and directions for future research.
Bovay, J., and W. Zhang. "A Century of Profligacy? The Measurement and Evolution of Food Waste." Agricultural and Resource Economics Review, 2020. [Full paper]
Abstract: Food waste has been recognized as an economic issue for at least a century and is gaining tremendous traction in academia as well as in discourse about public policy. The goal of our study is to examine the evolution of food waste over the last several decades at the U.S. and global levels. We first review the methodologies that have been used to estimate the magnitude of food waste so that the quality of the data can be evaluated. Though with limitations, existing data generally show that for many regions of the world, including the United States, pre-consumer food loss and waste as a share of total supply has been stable in recent decades. However, the aggregate share wasted masks important changes over time. We provide some evidence that food waste has shifted downstream in recent decades, i.e., from producers and processors to retailers and consumers. Through a reflection on the trends in major socioeconomic factors, we hypothesize that this downstream shift has been driven by increases in household incomes, improvements in technology, and changes in culture and institutions.
Ollinger, M., and J. Bovay. "Producer Response to Public Disclosure of Food-Safety Information." American Journal of Agricultural Economics, 2020. DOI:10.1093/ajae/aaz031. [Full text]
Abstract: Beginning in 2003, the USDA’s Food Safety and Inspection Service (FSIS) put forth a series of Federal Register announcements regarding the public disclosure of results of tests for Salmonella in chicken carcasses. In particular, FSIS suggested in 2003 that it might disclose the identities of any slaughter or ground meat plant failing its Salmonella tests if test performance did not improve, and in 2004 the service increased regulatory scrutiny of plants not meeting FSIS Salmonella standards. In 2006, FSIS introduced a more easily-understood measure of food-safety quality and indicated that public disclosure would be forthcoming if results of tests for Salmonella did not improve; FSIS targeted the chicken-slaughter industry with a high degree of specificity. In 2008, FSIS began reporting the names of chicken-slaughter plants with poor performance on tests for Salmonella in chicken carcasses. This article examines the effects of these regulatory actions on Salmonella test outcomes. We find that (1) announcements in 2003 and 2004 were associated with improved performance by the poorest-performing chicken-slaughter plants; (2) the introduction of an easily-understood measure of food-safety quality and the threat of disclosure of the identities of poorly performing plants in 2006 were associated with improved performance by all chicken-slaughter plants; and (3) implementation of a public disclosure program in 2008 was associated with improvements among better-performing chicken-slaughter plants.
Bovay, J., and D.A. Sumner. “Animal Welfare, Ideology, and Political Labels: Evidence from California’s Proposition 2 and Massachusetts’ Question 3.” Journal of Agricultural and Resource Economics 44(2):246–266. [Full text]
Abstract: This article explains incentives individuals face when deciding whether to support legislation on farm-animal treatment. We analyze precinct- and town-level voting patterns in two successful referendum votes (California’s Prop 2 and Massachusetts’ Question 3) that restricted animal-housing practices. In both cases, support for the referendum was positively correlated with support for the Democratic candidate for President and negatively correlated with employment in agriculture; support for Question 3 increased with income. We use our regression results to predict how voters in other U.S. states would have voted had they faced similar referendums in 2008 and 2016.
Bovay, J., and J.M. Alston. 2018. “GMO Food Labels in the United States: Economic Implications of the New Law.” Food Policy 78:14–25. [Accepted manuscript]
Abstract: In July 2016, the U.S. Congress passed Senate Bill 764, which requires the U.S. Department of Agriculture to establish a national disclosure standard for GE foods, as a compromise between forces pressing for a much stricter labeling law versus forces that opposed mandatory labeling laws altogether. The legislation, now known as Public Law 114-216, also preempts states from setting their own standards for mandatory GE labels. This article discusses the implementation of the new law and its potential economic consequences. We conclude that PL 114-216 is worse than a complete absence of mandatory labeling laws. However, it should be better than the likely scenario of policies that it pre-empted, and could be reasonably inexpensive, depending on the implementation details of the new law—which are yet to be determined—and how producers and consumers choose to respond to it.
Ollinger, M., and J. Bovay. 2018. “Pass or Fail: Economic Incentives to Supply Safe Meat to the National School Lunch Program.” American Journal of Agricultural Economics 100(2):414–433. DOI: 10.1093/ajae/aax088 [Full text]
Abstract: Ground beef sold to the USDA’s Agricultural Marketing Service (AMS) for distribution to the National School Lunch Program (NSLP) must meet stringent food-safety standards, specifically, a zero-tolerance standard for Salmonella. We use a unique data set containing information on Salmonella levels in order to examine the sequential decisions of ground-beef plants to become registered as AMS suppliers and then bid on contracts to supply the NSLP from 2006 to 2012. We find that plants exploit their competitive advantages in relatively high productivity and strong performance on Salmonella tests when choosing to bid on contracts in a given year. Furthermore, the incentives generated by the zero-tolerance standard for Salmonella are highly effective: ground beef supplied to the NSLP is 21–22 percentage points more likely to meet a zero-tolerance standard for Salmonella than ground beef tested as part of typical meat-plant inspections.
Bovay, J., and D.A. Sumner. 2018. “Economic Effects of the U.S. Food Safety Modernization Act.” Applied Economic Perspectives and Policy 40(3):402–420. [Full text]
Abstract: The Food Safety Modernization Act (FSMA) substantially expands the authority of the U.S. Food and Drug Administration to regulate fresh produce marketed in the United States. This article uses an equilibrium-displacement framework incorporating stochastic food-borne illness outbreaks to simulate long-run market effects of FSMA using the North American fresh-tomato industry as a case study. We demonstrate how, under FSMA, certain categories of suppliers will gain advantage over others. Growers and suppliers within the United States, and their buyers, are likely to gain relative to foreign producers and importers because FSMA imposes specific requirements for importers. Among fully regulated growers, large growers will benefit relative to small growers. Many producers have already adopted food-safety standards that closely resemble the FSMA rules, and the cost of implementing the FSMA requirements for these producers will be much lower than for other producers.
Bovay, J. 2017. “Demand for collective food-safety standards.” Agricultural Economics, 48(6):793–803.
Abstract: In 2007, leading members of the U.S. fresh-tomato industry responded to pressure from the U.S. Food and Drug Administration regarding the industry’s long history of poor food-safety outcomes and adopted a set of standards for production practices related to food safety at all levels of the fresh-tomato supply chain. Adherence to these standards was required under a federal marketing order that applied to essentially all tomatoes grown in Florida. The California Tomato Farmers cooperative, whose members produced the vast majority of fresh tomatoes grown in California, also required that its members adopt these standards. The collective food-safety standards for fresh tomatoes closely resemble the requirements of the U.S. Food Safety Modernization Act (FSMA) Produce Safety Rule, so the collective adoption of these standards provides an excellent case study to illustrate the possible effects of FSMA implementation on demand. I assess the hypothesis that demand for tomatoes from Florida and California increased following the adoption of standards for food-safety practices by growers in those states, relative to demand for tomatoes from other regions. My analysis demonstrates essentially no evidence that demand for fresh tomatoes responded positively to the implementation of collective food-safety practices.
Bovay, J., and J.M. Alston. 2016. “GM Labeling Regulation by Plebiscite: Analysis of Voting on Proposition 37 in California.” Journal of Agricultural and Resource Economics, 41(2):161–188 [lead article]. Winner, Outstanding Journal Article, JARE, 2016. [Full text]
Abstract: Many U.S. states have been considering proposals to introduce mandatory labeling requirements for foods containing GMOs. This paper analyzes precinct-level voting patterns in the case of California’s Proposition 37, which was narrowly defeated in the November 2012 ballot. Those voting patterns can be predicted primarily by support for Democrats, their platforms, and President Obama. Projections using our estimated model imply that a majority of voters in only three of fifty states (Hawaii, Rhode Island, and Vermont) plus the District of Columbia would have passed Proposition 37 had it been on their ballots in 2012.
Selected Peer-Reviewed Research Reports
Kuchler, F., C. Greene, M. Bowman, K.K. Marshall, J. Bovay, and L. Lynch. 2017. “Beyond Nutrition and Organic Labels—30 Years of Experience With Intervening in Food Labels.” Economic Research Report Number 239, U.S. Department of Agriculture, Economic Research Service. [Full text]
Abstract: Consumers are increasingly interested in farming methods and the nutritional quality of food. Manufacturers, in turn, are adding more information to food labels. In 1990, Congress passed two watershed laws on food labeling, one requiring nutrition labels to be included on most processed foods and the other requiring organic foods to meet a national uniform standard. This report examines the economic issues involved in five labels for which the Federal Government has played different roles in securing the information and making it transparent to consumers. In addition to the nutrition and organic labels, the report scrutinizes three other labels—one advertising foods made without genetically engineered ingredients, another advertising products made from animals raised without antibiotics, and the Federal country-of-origin label, which is now required for fresh and frozen fruits and vegetables, some nuts, fish and shellfish, ginseng, and certain meats. As interest grows in process-based and other types of food labeling, findings from these five case studies illustrate the economic effects and tradeoffs in setting product standards, verifying claims, and enforcing truthfulness.
Bovay, J. 2016. “FDA Refusals of Imported Food Products by Country and Category, 2005–2013.” Economic Information Bulletin Number 151, U.S. Department of Agriculture, Economic Research Service. [Full text]
Abstract: This report analyzes food import shipments that were refused entry into the United States by the U.S. Food and Drug Administration (FDA) from 2005 to 2013 and assesses patterns in import refusals. It highlights which products are most often found in violation, identifies the most common types of violations, and discusses country-product patterns of note and changes in import refusal patterns over time. The industry group with the most shipments refused over 2005-13 was fishery and seafood products, with 20.5 percent of refused shipments. This was followed by vegetables/vegetable products (16.1 percent) and fruit/fruit products (10.5 percent). The share of refusals for fishery/seafood products was slightly higher over 2005-2013 than over 1998-2004, while the shares for vegetables and fruit both decreased. The share of refusals for spices, flavors, and salts increased substantially, with more than one-third of refusals originating from India. Sanitary violations were the most common reason for a shipment refusal in both fishery/seafood products and fruit/fruit products, whereas pesticide residues were the most common violation for vegetables. FDA inspectors target certain firms or product categories that are prone to greater risks, so records do not represent a random sample of all U.S. food imports.
Ollinger, M., J. Bovay, C. Benicio, and J. Guthrie. 2015. “Economic Incentives to Supply Safe Chicken to the National School Lunch Program.” Economic Research Report Number 202, U.S. Department of Agriculture, Economic Research Service. [Full text]
Abstract: This report examines the food safety performance of establishments supplying raw chicken to the National School Lunch Program (NSLP) through the U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service’s (AMS) Poultry Products Purchase Program over 2006–12. This report focuses on the effectiveness of reputation as an incentive for producers to control Salmonella. To sell chicken through the Poultry Products Purchase Program, establishments must be registered with AMS and be in compliance with the standards imposed on all slaughter establishments by the USDA, Food Safety and Inspection Service (FSIS). Suppliers may exceed the FSIS standard, depending on their incentives. Raw chicken suppliers to AMS for the NSLP have an incentive to attain strong performance on Salmonella tests in order to ensure that they do not suffer product recalls, which, being associated with a highly visible customer, could harm their reputations for food safety and adversely affect profitability. However, suppliers also have an incentive to reduce costs, including those associated with food safety practices, to improve their profit margins. Findings indicate that AMS supplier concerns about increased scrutiny and the associated reputation effects when supplying the NSLP offset any incentive to underinvest in food safety to lower the costs of production.