@article{Lippert:98119,
      recid = {98119},
      author = {Lippert, Christian},
      title = {Zur Ökonomik der Kontrollmaßnahmen bei Lebensmitteln und  Futtermitteln},
      journal = {German Journal of Agricultural Economics},
      address = {2002},
      number = {670-2016-45605},
      pages = {14},
      year = {2002},
      abstract = {The objective of this article is to describe and to  analyse the basic
relationships between control frequency,  amount of fines, other social
sanctions, the producers‘  capability to influence certain attributes
(including costs  of quality assurance) and damage incidence in
the field of  food and feedstuffs safety. For this purpose an  economic
model is developed that minimizes monitoring costs  including (a)
the harm prevented and (b) the revenues from  fines. First, monitoring
measures are optimized by  exclusively taking account of the
interests of consumers  and taxpayers. In a second step, the model
is enlarged by  adding constraints relative to the costs of quality  assurance
so that aspects of both producer welfare and  total social
costs are explicitly accounted for when  simultaneously optimizing
the probability of detection and  the degree of punishment.
The results derived from the  model show among other things:
- From an economic point of  view legal regulation (i.e. the setting
of performance  standards) is advisable only in cases of comparatively
high  potential damages.
- Even when the entire production is to  be free from certain residues,
it is often not necessary to  check all units of the commodity
considered.
- In the  presence of (a) poor possibilities to influence an  attribute -
or a wide range of quality assurance costs  among producers -
and (b) prospective damages which justify  a control frequency of
one hundred percent, no fines at all  should be stipulated in order
to avoid allocative  distortions.
- In the case of strong social sanctions (e.g.  losses of reputation),
all else being equal the control  frequency may be lowered considerably.
Against the  background of these conclusions the application of  uniform
control frequencies is inappropriate. Instead,  every food control
authority should be free to choose the  size of samples, taking
into account not only the given  structure of fines but also its knowledge
concerning the  market specific social sanctions, monitoring
costs, the  extent of potential damages from legal transgressions  as
well as the producers’ possibilities and costs of  influencing the
relevant food or feedstuffs attributes.},
      url = {http://ageconsearch.umn.edu/record/98119},
      doi = {https://doi.org/10.22004/ag.econ.98119},
}