Using economics variables to identify adulteration in food imports: application to US seafood imports

• Brown Bag

Date and Location

Wednesday, September 19, 2012, 12:10 PM - 1:00 PM

Abstract

Current inspection systems do not use economic variables in assessing import risks even though adulteration has economic roots. This essay shows that inspection policies may integrate economic data to better target risk. The model considers exporting firms that can buy inputs low quality or high quantity inputs. The low quality input does not meet quality standards in the importing country and adulterates the output of the exporting firm. The decision by an exporting to adulterate its output depends on the relative price of inputs and the ability of the importing country to detect adulteration. The paper uses US seafood imports from China as a motivation and potential application of the model.