A pressing need in the area of food safety is a tool for making overall, macro judgments about which risks should be given priority for management. Governments often seek to base this prioritization on public health impacts only to find that other considerations also influence the prioritization process. A multi-factorial approach formally recognizes that public health, market-level impacts, consumer risk preferences and acceptance, and the social sensitivity of particular risks all play a role in prioritization. It also provides decision makers with a variety of information outputs that allow risk prioritization to be considered along different dimensions. Macro-level prioritization of risks based on multiple factors is an important expanded use of cost-benefit analysis to manage risk.cost-benefit analysis, food safety, risk prioritization

Julie A. Caswell

English

Research Papers in Economics

 
University of Massachusetts Amherst 
Department of Resource Economics 
Working Paper No. 2008-8 
http://www.umass.edu/resec/workingpapers 
 
 
Expanding the Focus of Cost-
Benefit Analysis for Food Safety:  
A Multi-Factorial Risk  
Prioritization Approach 
 
Julie A. Caswell
1 
 
 
 
 
Abstract: 
 
A pressing need in the area of food safety is a tool for making overall, macro judgments 
about which risks should be given priority for management. Governments often seek to 
base this prioritization on public health impacts only to find that other considerations 
also influence the prioritization process. A multi-factorial approach formally recognizes 
that public health, market-level impacts, consumer risk preferences and acceptance, and 
the social sensitivity of particular risks all play a role in prioritization. It also provides 
decision makers with a variety of information outputs that allow risk prioritization to be 
considered along different dimensions. Macro-level prioritization of risks based on 
multiple factors is an important expanded use of cost-benefit analysis to manage risk. 
 
Keywords: cost-benefit analysis, food safety, risk prioritization 
 
JEL Classification:  I18, L51, Q18, K32, H11 
________________________ 
 
1Julie A. Caswell, Department of Resource Economics 
University of Massachusetts, 215 Stockbridge Hall  
80 Campus Center Way, Amherst, MA  01003-9246 
E: caswell@resecon.umass.edu  P: 413-545-5735  F: 413-545-5853  
 
 
 
Expanding the Focus of Cost-Benefit Analysis for Food Safety: 
A Multi-Factorial Risk Prioritization Approach 
 
 
 
 
 
Julie A. Caswell 
Department of Resource Economics 
University of Massachusetts Amherst 
80 Campus Center Way 
215 Stockbridge Hall 
Amherst, MA 01003 
Phone: (413) 545-5735 
Fax: (413) 545-5853 
E-mail: caswell@resecon.umass.edu 
 
 
 
Acknowledgement: This paper is based on joint work with several colleagues. Please see: 
Henson, Spencer J., Julie A. Caswell, John A. L. Cranfield, Aamir Frazil, Valerie J. Davidson, Sven M. 
Anders, and Claudia Schmidt. 2007. A Multi-Factorial Risk Prioritization Framework for Food-Borne 
Pathogens. Working Paper 2007-8. Department of Resource Economics, University of Massachusetts 
Amherst. http://people.umass.edu/resec/workingpapers/documents/ResEcWorkingPaper2007-8.pdf 
  
 
Expanding the Focus of Cost-Benefit Analysis for Food Safety: 
A Multi-Factorial Risk Prioritization Approach 
 
 
Abstract:  
 
A pressing need in the area of food safety is a tool for making overall, macro judgments about 
which risks should be given priority for management. Governments often seek to base this 
prioritization on public health impacts only to find that other considerations also influence the 
prioritization process. A multi-factorial approach formally recognizes that public health, market-
level impacts, consumer risk preferences and acceptance, and the social sensitivity of particular 
risks all play a role in prioritization. It also provides decision makers with a variety of 
information outputs that allow risk prioritization to be considered along different dimensions. 
Macro-level prioritization of risks based on multiple factors is an important expanded use of 
cost-benefit analysis to manage risk. 
 
 
 
 
Keywords: cost-benefit analysis, food safety, risk prioritization 
 
 
 Expanding the Focus of Cost-Benefit Analysis for Food Safety: 
A Multi-Factorial Risk Prioritization Approach 
 
Background 
Governments around the world give support to the idea that risk management for food 
safety should be science based. A great deal of effort has gone into defining what science-based 
management means in principle and in practice (e.g., Health Canada 2000, NZFSA 2000, 
FAO/WHO 2002, Batz et al. 2004). A prominent example of the implementation of science-
based principles is the Agreement on the Application of Sanitary and Phytosanitary Measures 
(SPS Agreement) under the World Trade Organization (WTO), which gives a central role to risk 
assessment. 
A major hurdle in making science-based regulatory choices is that political leaders and 
risk managers who work in government must respond to a broad range of factors in making 
decisions. The most prominent of these is public health. However, one would be hard pressed to 
explain the decisions of regulatory agencies based solely on the management of rates of illness 
and death. Other factors are also important, including the impact of a risk and its management on 
industry, the concern consumers express about a risk, and sensitivity about who is impacted by 
the risk and how. Limited resources mean that only a subset of food safety risks can be given 
priority in management plans. 
It may be manageable to outline what science -based decision making looks like when the 
focus in making decisions is only on the public health aspects of food safety. But what might it 
look like if the approach is expanded to consider the other important factors that affect risk 
management choices? Such an approach would make the factors affecting decisions more 
explicit and the process more transparent and defensible. 
  1An Expanded Approach to Prioritizing Risks 
 
A first-stage version of an expanded approach to food safety risk management has been 
developed by a group of researchers at the Public Health Agency of Canada, the University of 
Guelph, and the University of Massachusetts Amherst (Henson, Caswell, Cranfield, Frazil, 
Davidson, Anders, and Schmidt 2007). The discussion here is based on this Multi-Factorial Risk 
Prioritization Framework and the work of this group that attempts to incorporate all dimensions 
of the decision-making environment into a single decision tool. 
A pressing need in the area of food safety is a tool for making overall, macro judgments 
about which risks should be given priority for management. It is important to the degree possible 
that such a tool incorporate all the considerations that ultimately influence decisions. What 
happens when this is not the case? A frequent scenario has governments and their regulatory 
agencies building systems to base priorities on public health concerns only to find that the 
priorities decided upon do not correspond as closely as they might have anticipated to those 
dictated by such health concerns. Why have the system if it is not used? The answer is likely to 
be that it is being used but in conjunction with an additional set of factors that modify the public 
health priorities. Adding even further confusion is the likelihood the priorities have been 
reordered based on industry or micro factors. An example is ad hoc consideration of assessments 
of the feasibility of risk management options. A risk that is lower on the list in terms of public 
health impact might move up in the priorities because it is perceived that an effective risk 
management approach already exists. The exclusion of important factors that influence decisions 
and the mixing of macro- and micro-level information may lead to incoherent decisions or at 
least to decisions that appear to be incoherent. 
 
  2Orientation of the Framework 
 
An expanded approach to decision making, and ultimately to cost-benefit analysis, such 
as the Multi-Factorial Risk Prioritization Framework incorporates all dimensions of the decision-
making environment into the decision tool. It also provides decision makers with a variety of 
information outputs that allow risk prioritization to be considered along different dimensions. 
The latter is important for at least two reasons. First, different ways of presenting information 
allow decision makers to appreciate the different dimensions of risks. Second, information to 
make decisions is always incomplete. Presenting a single “result” of the prioritization process 
tends to imply much more certainty than actually exists. 
How does an expanded approach to risk prioritization such as proposed by the Multi-
Factorial Risk Prioritization Framework fit with the call for science-based regulatory decision 
making? My view is that it extends the scientific base for decision making beyond the confines 
of risk assessment into the development of a broad set of information useful in setting priorities. 
This set of information is contributed by the life and social sciences. The goal is more coherent 
decision making. 
Focusing on Food-Pathogen Pairings and Multiple Factors 
 
The Multi-Factorial Risk Prioritization Framework uses food-pathogen pairings (e.g., 
beef and E. coli O157:H7) as its basic unit of analysis, as do many other approaches to 
prioritization and to attribution of food safety related illness and deaths. An advantage of using 
this basic unit of analysis is that information can subsequently be aggregated by food for all 
pathogens or by pathogen for all foods. A disadvantage is that many cells in the food-pathogen 
matrix will be lacking in information. However, using this breakdown makes it clear where 
important information is missing. 
  3An expanded approach to risk prioritization needs to capture all the relevant factors that 
ultimately influence risk management decisions. Clearly there are many ways that one might try 
to capture these factors. The Multi-Factorial Risk Prioritization Framework does so by first 
including the central criterion of public health impacts, measured in the recognized approaches 
of Disability Adjusted Life Years (DALYs) and cost of illness. A second factor focuses on 
consumer risk perceptions and acceptance to capture differences in priority setting that may be 
responsive to differences in consumers’ views of the seriousness of particular risks and their 
acceptance of them. A third factor is the market level impacts of a risk and its management. For 
example, the size of an industry domestically, how much it exports, or the number of people it 
employs may affect priorities for managing risks it poses. Finally, a fourth factor is social 
sensitivity. This factor captures risks that societies place more importance on managing, for 
example, risk that affect pregnant women or children. 
This set of factors, or another set that tries to reflect the same range, clearly expands the 
analytical focus of risk prioritization and cost-benefit analysis for food safety. Objections to this 
approach may be that it increases the information burden and raises questions about how to 
aggregate across factors to get ‘an answer’. However, since this range of factors is already being 
considered by risk managers, albeit usually on an ad hoc basis, the scope of information to be 
used has not really expanded but the quality of the information would need to be improved. The 
need to aggregate across factors is not an issue if it is recognized early on that the factors are 
indeed multi-dimensional and cannot be aggregated. 
Presenting Information for Prioritization 
 
Organizing and presenting relevant data is a key challenge for efforts to prioritize food 
safety risks for management purposes. As noted above, the Multi-Factorial Risk Prioritization 
  4Framework visualizes food-pathogen pairings as the basic unit of analysis and within each 
pairing it proposes a separate information card showing food-pathogen-factor information. These 
information cards can be used directly by decision makers to understand the underlying data. 
Information on the multiple factors should be presented in additional ways to decision 
makers. A simple but effective way is to use cobweb drawings to show how different food-
pathogen combinations compare across factors. Figure 1 shows an example where the rays from 
the center of the cobweb represent four separate factors. An alternative, more formal analytical 
approach is to use multiple criteria decision analysis to set criteria and rank risks based on those 
criteria. Experience will indicate which set of formats is most helpful to decision makers. In 
general, different formats are likely to be complementary to each other rather than being 
substitutes in the delivery of information. 
 
Figure 1. A Graphical Approach to Presenting Risk Profiles 
 
 
Pathogen 1, Food 1  Pathogen 2, Food 2  Pathogen 3, Food 3 
 
Graphical Profile of 
Risks using Cobweb 
Diagrams 
 
 
 
 
 
 
 
 
Source: Henson, Caswell, Cranfield, Frazil, Davidson, Anders, and Schmidt 2007, p. 34. 
 
 
Developing Outputs from the Prioritization Process 
Risk prioritization is by its nature an iterative process; new information calls for the 
systematic updating of the analysis. A first output envisioned from use of an approach such as 
the Multi-Factorial Risk Prioritization Framework by risk managers is a list of food-pathogen 
  5risks based on criteria that they apply. Work by Henson et al. (2007) suggests that this list be 
made without considering either feasibility analysis for possible management strategies or 
uncertainty analysis. Feasibility and uncertainty analysis can then be systematically applied as a 
second stage to generate lists that take these factors into consideration. 
Conclusions 
 
Cost-benefit analysis can be used at many levels to evaluate food safety regulations. It is 
most often thought about and done on a micro level. For example, what are the costs and benefits 
of two alternative interventions for controlling the health risks associated with a particular food-
pathogen combination? More generally, however, at the macro-level prioritization of risks for 
management purposes in the area of food safety is a key form of cost-benefit analysis. Good 
macro level analysis is essential to identify the specific food-pathogen combinations and 
intervention strategies that will receive the micro-level cost-benefit analysis.  
Good cost-benefit analysis at the micro level has long made a concerted effort to measure 
all the life and social science factors that influence the ultimate impact of a food safety 
regulation. Expanding the scope of cost-benefit analysis is also important at the macro level of 
analysis. At this level, risk managers do in fact recognize multiple factors in setting priorities. 
Public health is key but factors such as consumer risk perceptions and acceptance, market level 
impacts, and social sensitivity are also influential. However, these additional factors are often 
brought in on an ad hoc basis, which undermines the reliability of the analysis. The quality of 
macro-level decision making on priorities for food safety regulation can be aided by a 
comprehensive framework that explicitly considers the multiple factors that influence the 
benefits and costs of risk management. 
  6  7
References 
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Health Canada (2000) Health Canada Decision-making Framework for Identifying, Assessing 
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A Multi-Factorial Risk Prioritization Framework for Food-Borne Pathogens. Working Paper

Health Canada Decision-making Framework for Identifying, Assessing and Managing Health Risks. Health Canada,

Identifying the Most Significant Microbiological Food-Borne Hazards to Public Health: A New Risk Ranking Model. Food Safety Research Consortium Discussion Paper Series

Principles and Guidelines for Incorporating Microbiological Risk Assessment

Expanding the Focus of Cost-Benefit Analysis for Food Safety: A Multi-Factorial Risk Prioritization Approach

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