The lack of a reliable safe food supply in developing nations brings with it both health and economic costs. A recent article published in Agricultural Economics explores the idea that brands that can ensure the safety of their food should be able to charge higher prices for their product. This ability to earn higher profit in turn incentivizes brands to meet and maintain higher food safety standards.
Food safety remains a significant concern in many developing countries, thanks to a prevalence of decentralized, informal food markets and low enforcement of food safety standards. Formal markets and branded food products are starting to become more common, however, allowing firms to establish themselves in consumers’ minds as providers of safe, high quality food – and potentially to charge higher prices for that food.