Ferrier, Peyton M.

January, 2023

By: Ferrier, Peyton M.; Zhen, Chen; Bovay, John
We estimate the cost of compliance with the US Food Safety Modernization Act (FSMA) Produce Safety Rule by commodity and own- and cross-prices elasticities of demand for 18 fruits and 20 vegetables. These are used as inputs in an equilibrium displacement model that simulates the price and welfare effects of the rule. We find that consumer and farm prices increase by 0.55% and 1.69% for fruits and 0.15% and 0.59% for vegetables. Costs associated with implementation are estimated to reduce producer welfare by 0.63% for fruits and 0.51% for vegetables (as a share of revenue). If the rule's provisions were enacted unilaterally by growers of individual commodities, producer welfare losses would be 0.93% of total revenue for fruits and 0.31% for vegetables.

September, 2017

By: Ferrier, Peyton M.; Zhen, Chen
Between 1991 and 2013, the share of fresh vegetables consumed rose from 47% to 56%. While median incomes grew 7.9%, the growth was uneven, with negligible growth occurring in the bottom two quintiles. Estimating an EASI demand system for fresh and preserved vegetables that accounts for corner solutions, we find that income elasticities are larger for fresh vegetables than for preserved vegetables for consumers in the top three but not the bottom two income quintiles. Simulations accounting for uneven income growth indicate that income growth accounts for 0.7 percentage points of the 9 percentage point increase in fresh share.