Benefit/Cost Analysis in Public and Private Decision-Making in the Meat and Poultry Supply Chain

  • Tanya RobertsEmail author
Part of the Food Microbiology and Food Safety book series (FMFS)


Benefit/cost analysis (BCA) is a tool that can be used to examine either public or private decision-making. What differs is what variables are included in each BCA. Hazard Analysis and Critical Control Point/Pathogen Reduction (HACCP/PR) regulation was established in 1996 for US meat and poultry. From the US government’s perspective, the estimated benefits of HACCP were a reduction in foodborne illnesses of the American public citizens and their expenses (medical costs, productivity losses, and pain and suffering) vs. the costs to industry of implementing the HACCP regulations. The public health protection benefits were estimated to be in the billions of dollars, while the industry costs were in the millions of dollars.

A private firm’s decision whether to invest in poultry production in China, however, examines benefits and costs using variables to determine profitability. Some of the factors to be considered in this private BCA include (1) the increasing demand for poultry meat in China and other Asian countries with rising incomes; (2) the demand for the wide range of chicken parts in China; (3) the cost savings of raising chickens in China, including lax environmental regulations and enforcement; (4) the possibility of selling chicken breasts (and frozen chicken products) in the US market at a premium price that more than covers all costs, including transportation; and (5) competition with increasingly global food companies in Asian markets.


Benefit/cost analysis Food safety Hazard Analysis at Critical Control Points (HACCP) Prevention Pathogens Chinese chicken Regulation 



Avian Influenza


Benefit/Cost Analysis


Critical Control Point


Center for Disease Control and Prevention/USA


Executive Order from the President of the USA


Economic Research Service/USDA


Food Safety and Inspection Service/USDA


Hazard Analysis and Critical Control Points


International Commission on Microbiological Specifications for Food


Long-term health outcomes


Office of Information and Regulatory Affairs/OMB


Office of Management and Budget/USA


Poultry Products Inspection Act/USDA


United States Department of Agriculture



Many thanks to review comments from Mary Ahearn, Walter Armbruster, and Diogo M. Souza Monteiro. All omissions and misstatements, of course, remain my errors.


  1. Alonzo A. Top 5 broiler producers dominate U.S. production, Poultry International, July 2016.Google Scholar
  2. Anderson L, Inouye A. China – Peoples Republic of poultry and products semiannual 2017 – Chinese year of the rooster, GAIN report number: CH17005, USDA/Foreign Agricultural Service, 2017 Feb 1. Available at
  3. Buzby JC, Roberts T, Lin C-T J, MacDonald JM. Bacterial foodborne disease: medical costs and productivity losses, USDA/ERS, AER-741. 1996 Available at
  4. Calvin L, Gale F, Food safety improvements underway in China, Amber Waves, ERS/USDA, Nov 2006. Available at
  5. CDC. Foodborne Diseases Active Surveillance Network (FoodNet): FoodNet 2015 Surveillance Report (Final Data). Atlanta, GA: U.S. Department of Health and Human Services, CDC; 2017.Google Scholar
  6. Cobb-Vantress website, How Cobb has become world leader. Available at Accessed Jan 2017.
  7. Codex Alimentarius Commission. Hazard Analysis and Critical Control Point (HACCP) system and guidelines for its application. 1997.
  8. Crutchfield S, Buzby JC, Ollinger M, Lin C-TJ, An economic assessment of food safety regulation: the new approach to meat and poultry inspection. ERS/USDA, AER-755, 1997.Google Scholar
  9. Ekelund RB, Herbert RF, Jules Dupuit. Engineer and Economics, Public lecture at the University of Montreal, 2000 Mar 24. Available at
  10. Food Safety and Inspection Service/USDA. Pathogen reduction; hazard analysis and critical control point (HACCP) systems; final rule. Federal Register. Washington, DC: USGPO. 1996;61(144):38805–989.
  11. FSIS/USDA. FSIS announces proposed rule on eligibility of the People’s Republic of China to export poultry products to the United States, FSIS constituent update, June 16, 2017.
  12. Hahn RW, Noll R, Stavins R, Schmalensee RL, Lave LB, Portney PR, et al. Benefit-cost analysis in environmental, health, and safety regulation: a statement of principles. Washington, DC: AEI Press; 1996.Google Scholar
  13. Jacobs A. China’s appetite pushes world’s fish stocks to the brink, New York Times, 2017 April 29. Available at
  14. JBS website.: Accessed Aug 2017.
  15. Leonard C. The meat racket. New York: Simon & Schuster; 2014.Google Scholar
  16. Office of Management and Budget (OMB). Economic analysis of Federal regulations under Executive Order 12866, January 11, 1996. Available at Accessed 8 Nov 2017.
  17. Ortega DL, Wang HH, Chen M. Emerging markets for U.S. meat and poultry in China. Choices. 2015;30(2):1–4. Available at Google Scholar
  18. Pant M. We are ready for the next thirty years, CEO speech at the annual meeting of Yum China stockholders, 2017. Available at
  19. Roberts T. Economics of private strategies to control foodborne pathogens. Choices. 2005;20(2):117–22. Google Scholar
  20. Roberts T. Lack of information is the root of U.S. Foodborne illness risk. Choices 2013;28(2).
  21. Roberts T, Unnevehr L. New approaches to regulating food safety, FoodReview. USDA/ERS. 1994;17(2):2–8.Google Scholar
  22. Runyon L. JBS, world’s largest meat company, mired in multiple corruption scandals in Brazil. KUNC Fresh Air, Aug 3, 2017.
  23. Tyson website, About Tyson China. Available at Accessed May 2017.
  24. Viscusi WK. The value of risks to life and health. J Econ Lit. 1993;31:1912–46.Google Scholar

Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Economic Research Service, USDA (retired)Center for Foodborne Illness Research and PreventionVashonUSA

Personalised recommendations