WTP estimates of the societal costs of U.S. food-borne illness.

--12,878,489 cases who see a physician but have no test or a negative test

--60,800,000 cases who do not seek medical care

Valuation of Severity Categories

For the four categories of morbidity, I use Hammitt and Haninger's values in table 2. The survey instrument was designed to elicit separate adult and child values, namely what the parent is willing to pay to protect his or her child from a food-borne illness.

For mortality values, I use different values for adults, children, and the elderly. Adults are valued at $7 million each, based on Viscusi and Aldy's 2003 review of the VSL literature where the range is $4 million to $9 million. The midpoint, accounting for some inflation, is roughly $7 million today. The elderly, 70+, are valued at 30% less, or $5 million, based on Blomquist's review (2004). Children are valued more highly, based on Hammitt and Haninger's ratio for hospitalized cases. Here the child value is around 70% higher than the adult value, or $26,700 divided by $16,100. Consequently, the death of a child from a food-borne illness is valued at $12 million.

Mead et al. estimate that there are 5,200 deaths caused by acute food-borne illness annually (1999). I use the age breakdown of food-borne illness deaths, based on the FoodNet data from 2001 to 2005 (table 2). Children (0-14) account for 10% of the deaths, adults (15-69) account for 43 %, and the elderly (70+) account for 47%. The total value for all deaths is $34 million; the age breakdown is $6.2 million for children, $15.7 million for adults, and $12.2 million for the elderly (table 3).

The societal cost contribution of each of the five severity categories is markedly different from ERS traditional estimates, largely because of the valuation method. In table 3, WTP estimates are used for both deaths and milder cases. Traditionally, the ERS has used WTP only for deaths and has valued less-severe cases with the Cost of Illness method, grounded in medical costs and productivity losses. The ERS's use of the Cost of Illness method omits values for lost leisure time, pain and suffering, and disruption of daily life that are captured in WTP values. In the traditional ERS estimates, deaths and chronic complications are the largest contributors to the costs of human illness. In contrast, the leading cost component in the WTP estimates is cases where no medical care is received. This severity category contains 80% of the illness cases and contributes over $1 trillion to the societal WTP cost estimate. A WTP estimate for twenty-four hours of food-borne illness with moderate symptoms (table 1) is $11,100 for an adult case and $28,000 for a child's case. One interpretation of the high value for twenty-four hours of illness is that consumers surveyed are intolerant of food-borne illness and expect that the government and industry will protect them from food-borne illness.

Another difference in WTP versus traditional ERS estimates is that for the first time all seventy-six million cases of acute food-borne illness are included. Previous estimates examined only a few specific pathogens. This estimate of the societal costs of food-borne illnesses totals $1.4 trillion, compared to the last ERS estimate of $6.9 billion for five pathogens causing food-borne illness (Crutchfield and Roberts 2000).

Sensitivity Analyses and Discussion

Since WTP survey results are typically not very sensitive to differences in severity or duration of illness, a sensitivity analysis is performed for the estimated societal costs of food-borne illness (tables 1 and 3). In table 1, the duration of illness varies from one to seven days. Another method to estimate WTP to avoid one day of illness is to start with Hammitt and Haninger's estimate for seven days of illness and divide by seven. This forces each day's value to be identical within a severity category. For example, if the moderate symptoms are forced to be linear, the adult one-day value of illness becomes $2,060 and the child one-day value of illness becomes $3,786. The total cost of illness estimate becomes $269 billion for those not seeking medical care. For those who see a physician but do not have a positive test, the three days of illness are now valued at $6,170 per adult and $11,360 per child and total $107 billion for this severity category. These linear estimates dramatically lower the total societal costs of food-borne illness from $1.4 trillion to $455 billion annually. (5)

Recent food-borne illness outbreaks have led to a decline in the percentage of shoppers confident about the safety of supermarket food from 82% in 2006 to 66% in 2007, according to the Food Marketing Institute's annual survey (Feedstuffs FoodLink 2007). Consumer confidence in restaurant food is even lower at 43 %. The intensity of current public concern about food safety dates back to the early delegation of food safety inspection to the federal government. In 1906, public outrage over slaughterhouse practices chronicled by Upton Sinclair in The Jungle and over chemicals added to foods and drugs pushed Congress and the President to mandate federal inspection for meat crossing state lines and to create the Food and Drug Administration. However, enforcement remains an issue, which is not unusual for a public good with moral hazard properties. For example, the FSIS does not have the authority to order recalls or impose fines on companies producing contaminated products. FSIS does not post pathogen test data by company on the web, but instead provides very general test data by type of product.

Conclusion

The high societal costs estimated for food-borne illness and the high level of consumer concern about food safety in supermarkets and restaurants contrast sharply with the exceedingly low probability of consumers' ability to identify the food, pathogen, and company that made them ill and to win compensation. Although food safety has been delegated to the federal government, enforcement tools are limited, which can hinder the attainment of the level of food safety preferred by consumers.

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