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Some of the first economic estimates of the costs of foodborne
illness were provided by ERS. ERS researchers are currently
updating and refining estimates of the costs of foodborne illness,
along with details on the assumptions behind the estimates, and
will release this information in an updated Foodborne Illness Cost
Calculator.
History of ERS Cost
Estimates
ERS researchers conducted some of the earliest studies on the
economic costs of foodborne illness and have since updated and
expanded these analyses using improved estimation methods and
better data. Each series of ERS estimates incorporated better
information on disease incidence, more detailed data on the health
consequences of foodborne illness, and advances in the economic
methodologies for valuing health outcomes.
ERS published its
first
comprehensive cost estimates for 16 foodborne bacterial
pathogens in 1989. These initial estimates reflected the limited
information then available about the incidence of foodborne
illness, and used cost-of-illness (COI) methodology to tally
expenditures on medical care and lost productivity due to nonfatal
illness and premature death.
In 1996, ERS updated the cost estimates for six bacterial pathogens
(Campylobacter, Clostridium perfringens,
Escherichia coli O157:H7, Listeria
monocytogenes, Salmonella, and Staphylococcus
aureus) and also estimated the cost of one foodborne parasite (toxoplasma
gondii) 
. ERS continued to use the
COI methodology for nonfatal illnesses, but adopted two different
health valuation methodologies for premature deaths: the
individualized human capital approach and the willingness-to-pay
(WTP) approach.
ERS updated the cost estimates for four pathogens
(Campylobacter, Salmonella, E. coli
O157:H7, and Listeria monocytogenes) again in 2000, and
also estimated the cost for E. coli
non-O157:H7 .
The 2000 estimates were based on 1999 estimates of annual foodborne illnesses by the Centers for
Disease Control and Prevention (CDC). The COI methodology was used
for nonfatal illnesses, and the WTP approach was used for premature
deaths.
The Salmonella cost estimate was prepared in collaboration with CDC's FoodNet
Foodborne Diseases Active Surveillance Network, and used new
sources of data on medical costs and productivity losses including
FoodNet surveillance data and a large commercial medical claims
database.
The
cost
estimate for E. coli O157:H7 (now termed STEC O157)
was subsequently updated in collaboration with FoodNet in 2005,
using FoodNet surveillance data and a case-control study of STEC
O157 patients.
In 2003, ERS introduced the Foodborne Illness Cost Calculator,
an interactive online version of the updated ERS cost estimates for
selected foodborne pathogens. The Cost Calculator initially
included the Salmonella cost estimate, and later added the
STEC O157 estimate. The Cost Calculator provides detailed
information about the assumptions underlying each estimate, and
allows users to make alternative assumptions and re-estimate the
costs. An updated version with additional pathogens of the Cost
Calculator is in development.
Estimation Methods
ERS researchers have used two methodologies developed by
economists for converting adverse health outcomes to a common unit
of measurement:
- cost of illness, and
- willingness to pay.
These methodologies and three other approaches for evaluating
the effects of policy on health and safety--cost-effectiveness
analysis, risk-risk analysis, and health-health analysis--are
reviewed in Assigning Values to Life: Comparing Methods for
Valuing Health Risks.
The cost-of-illness (COI) approach tallies dollars spent on
medical expenses and forgone earnings as a result of illnesses,
accidents, or premature deaths. COI estimates have often served as
a measure of the monetary benefits of government programs that
promote health and reduce the number of premature deaths,
illnesses, or injuries. In this kind of analysis, the costs that
are avoided are considered to be a lower bound of the value of
program benefits. ERS researchers have consistently used the COI
approach for nonfatal illnesses, and prior to 1996, they also used
this approach for premature deaths.
The willingness-to-pay (WTP) approach measures the resources
that individuals are willing and able to give up for a reduction in
the probability of encountering a hazard that will compromise their
health. It assigns dollar values to life and health, and reflects
individual preferences for risk reduction. ERS researchers began
using the WTP approach in 1996 for premature deaths.
For the 2000 cost estimates, ERS researchers updated the
original 1990 estimate of the value of a statistical life for
inflation, and then adjusted this value for age at death. Under
this approach, the value of a statistical life is treated as if it
were an annuity paid over the average U.S. lifespan at an interest
rate of 3 percent. For example, in the updated STEC O157 cost
estimate, the estimated value of a statistical life in 2001 dollars
varies from $9.0 million at birth to $1.8 million at age 85.
ERS has maintained an online Foodborne Illness Cost Calculator
since 2003; however, this tool is currently unavailable while ERS
revises its estimates of the cost of foodborne illness.
The modified ERS approach has been described in several
publications: