UC Davis

This dissertation studies the economics of food regulation, with applications to food safety, third-party certification, and litigation. It contains 2 main parts. The first part of the dissertation contains two essays: the first essay studies the value of certification in signaling food safety; the second highlights the effectiveness of the common auditing system on firms' behavior change. In the second part, I study the impacts of food safety lawsuits on governmental regulatory behaviors and firms' food safety practices.

Third-party certification has been widely adopted in the food industry, but its credibility and effectiveness are controversial. In Part I, I assemble a comprehensive data set using plant inspection records from the U.S. Food Safety and Inspection Service (FSIS) and food safety certification results from both the Safe Quality Food (SQF) and the British Retail Consortium (BRC) global standards program. The first essay examines the role of third-party certification on certified plants' food safety practices and outcomes in the meat and poultry industry. I take the compliance rate of FSIS sanitary tasks as a measure of the level of food safety practices and the FSIS pathogen sampling test results as a measure of food safety outcomes. I find that certification ratings are informative of plants' food safety practices, but not their food safety outcomes. Leveraging the timing of initial and re-certification audits, the second essay finds SQF certified plants have a gradual increase in their average food safety practice level after initial audits, but not BRC certified plants. I do not find a significant impact of re-certification audits on food safety practices.

In Part II, I study the net impact of food safety lawsuits brought by those who claim harm on public food safety regulation intensity and defendant plants' food safety practices by combining a food safety lawsuit dataset that I developed with FSIS inspection records and exploiting information on the timing of lawsuit filing dates. I find that food safety lawsuits have a crowd-out effect on the regulatory intensity in inspection tasks that are directly relevant to the food safety disputed issues in the specific lawsuit. There is no evidence that food safety lawsuits have a statistically significant impact on defendant plants' food safety practices. The empirical result expands the knowledge of the interactions of plaintiffs' claims in litigation, public regulation, and plant behaviors in the context of food safety issues in the US meat and poultry industry.