How Do Spillover Effects Influence the Food Safety Strategies of Companies? New Orientation of Regulations for Food Safety

The food safety strategies of companies are a key point in the reduction of food safety risks. In order to encourage the evolution of food safety strategies of companies from food fraud to safety investment, this study builds an evolutionary game model, taking large and small companies as participants, to reveal the dynamic process of spillover effects influencing the choice of food safety strategies of companies. The study shows that (1) the food safety strategies of companies change from safety investment to food fraud, along with the increasing opportunity costs of safety investment. (2) The costs structure of small companies mainly determines whether the industry reaches the equilibrium of safety investment, while the costs structure of large companies mainly determines whether the industry reaches the equilibrium of food fraud. (3) Both competition effects and contagion effects encourage companies to choose safety investment. The more obvious spillover effects of incidents on food safety are, the more likely it is that companies will choose safety investments. (4) Increasing the costs to companies for incidents on food safety and reducing the opportunity cost of safety investment motivates companies to choose safety investment. Consequently, a new orientation of regulations for food safety is formed: the government should allocate different regulatory resources to counteract food fraud behaviors or technologies with a different benefit, should increase the technical costs and costs incurred from committing acts of food fraud, and should expand spillover effects of incidents on food safety.

Trading off wage for workplace safety? Gaps between immigrants and natives in Italy

We employ Italian administrative data to analyze the differentials in wages and workplace injuries between immigrants and natives over the 1994–2012 period. Via propensity score reweighting, we construct the factual and counterfactual, marginal and joint distributions of wages and workplace injuries. Examining the differentials along the entire distributions, our approach yields novel insights on their potential drivers. Our findings confirm that immigrants face lower wages and a substantially higher injury risk than natives; futhermore, they highlight that foreign-born workers display a disproportionate concentration of injuries around the minimum contractual wages. Our results show that the latter can be interpreted as an unintended effect of minimum contractual wages. Indeed, if wages are downward rigid and workplace safety investments are costly, firms employing low-wage workers may reallocate their savings away from wages onto safety. Over time, the gap is found to shrink. Our analysis suggests that, beyond the reduction in workplace intensity during recessions, this may be due to destruction of marginal jobs. Being disproportionally concentrated in marginal occupations, then, lower-skilled migrant workers are more vulnerable to downturns in the economic cycle. Overall, our results highlight that labour market segmentation may co-exist with wage regulations.

Product Safety and Harm-Mitigation Incentives When Mitigation Lowers Consumption Benefits

To reduce the expected harm its product causes to consumers, a firm can invest in a product’s safety before sale or mitigate harm after sale in the event product risks materialize. After-sale harm mitigation interferes with consumers’ product use and reduces consumption benefits. We describe a firm’s incentives for safety investments and harm mitigation as a function of the level of the firm’s liability. Whereas post-sale mitigation incentives are scaled up by liability, pre-sale product safety is a U-shaped function of liability, making the two harm reduction instruments substitutes at low levels of liability and complements at high levels. To induce efficient harm mitigation, liability must be less than full. Further reducing the level of liability improves product safety at the cost of the firm’s profits. (JEL K13, D42).

Food safety investments factors in the Italian meat sector: conceptual framework and empirical evidence

The paper investigates how food safety investment decisions are affected on the one hand by laws and on the other by firm’s economic and organizational drivers. The paper shares findings from an empirical study that considers investments in HACCP, Certification, and Traceability in the Italian meat sector. The main finding of the study is that the allocation of the decision rights to invest in food safety explains the patterns of investment decisions observed. The conclusion is that regulatory interventions are more effective if there is a private possibility to allocate investment decision rights with respect to the distribution of information between private and public agents and the degree of uncertainty. The study contributes to the analysis of the allocation of the decision rights in the organization of value chain. Under this innovative view, it empirically shows how regulation and freedom of contract act as drivers of food safety investments. The research is particularly interesting in its policy implication: information regarding the role of these collective bodies will become relevant in the near future in the context of expected changes in the EU’s agricultural policy.

Comparative Analysis of Empirical Bayes and Bayesian Hierarchical Models in Hotspot Identification

Hotspot identification is an important step in the highway safety management process. Errors in hotspot identification (HSID) may result in an inefficient use of limited resources for safety improvements. The empirical Bayesian (EB) HSID has been widely applied as an effective approach in identifying hotspots. However, there are some limitations with the EB approach. It assumes that the parameter estimates of the safety performance function (SPF) are correct without any uncertainty, and does not consider temporal instability in crashes, which has been reported in recent studies. The Bayesian hierarchical model is an emerging technique that addresses the limitations of the EB method. Thus, the objective of this study is to compare the performance of the standard EB method and the Bayesian hierarchical model in identifying hotspots. Three methods (crash rate, EB, and the Bayesian hierarchical model) were applied to identify risky intersections with different significance levels. Four evaluation tests (site consistency, method consistency, total rank differences, and Poisson mean differences tests) were conducted to assess the performance of these three methods. The testing results suggest that: (1) the Bayesian hierarchical model outperforms the crash rate and the EB methods in most cases, and the Bayesian hierarchical model improves the accuracy of HSID significantly; and (2) hotspots identified with crash rates are generally unreliable. This is significant for roadway agencies and practitioners trying to accurately rank sites in the roadway network to effectively manage safety investments. Roadway agencies and practitioners are encouraged to consider the Bayesian hierarchical model in identifying hotspots.

An analysis of food safety private investments drivers in the Italian meat sector

Food safety systems that implement Hazard Analysis and Critical Control Points (HACCP), certification, traceability, brands as well as in geographical indications and private branding require dedicated investments in physical resources, human resources and in re-organising the production processes and control activities. Investment decisions can be made according to legal requirements or based on voluntary decisions. In this study, we address the two following research questions: do the inducements due to the regulatory framework influence the decision to invest in the implementation of food safety strategies and what is the size of this potential influence? Does the allocation of the decision right to invest influence the investment decision and does this potential influence vary across food safety systems? We carried out an empirical investigation on investment decisions in the Italian meat sector, comparing systems dedicated to safety and marketing strategies. The knowledge of such an influence provides a better understanding of the micro-level motivations of food safety investments in a critical area and contribute to the design of regulatory strategies.