Firm Heterogeneity in Food Safety Provision: Evidence from Aflatoxin Tests in Kenya

24 Pages Posted: 10 Mar 2015

See all articles by Christine M. Moser

Christine M. Moser

Cornell University - Department of Economics and Management

Vivian Hoffmann

International Food Policy Research Institute

Date Written: February 13, 2015

Abstract

The lack of a reliably safe food supply in developing countries imposes major costs on both public health and market performance. This paper addresses the question of whether and why food processing firms voluntarily invest in food safety in the absence of effective regulatory enforcement. Using data from more than 900 maize flour samples representing 23 distinct brands in eastern and central Kenya, we explore the relationship between price, brand, and aflatoxin contamination. Aflatoxin is a toxin common in maize, groundnuts, and other crops around the world; and although it is unobservable to the consumer, it may be correlated with other quality characteristics. We find a strong negative correlation between price and contamination rates, which is consistent with certain brands investing more in quality to avoid loss of reputational capital.

Keywords: food safety, firm strategy, voluntary compliance, brand capital

Suggested Citation

Moser, Christine M. and Hoffmann, Vivian, Firm Heterogeneity in Food Safety Provision: Evidence from Aflatoxin Tests in Kenya (February 13, 2015). IFPRI Discussion Paper 01416, Available at SSRN: https://ssrn.com/abstract=2567751

Christine M. Moser (Contact Author)

Cornell University - Department of Economics and Management ( email )

206 Warren Hall Campus
Ithaca, NY 14853-7601
United States
607-272-0496 (Phone)

Vivian Hoffmann

International Food Policy Research Institute ( email )

2033 K Street NW
College Park, DC District of Columbia 20742-5535
United States
12028628169 (Phone)

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