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Infectious Disease, Productivity, and Scale in Open and Closed Animal Production Systems

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  • Helen H. Jensen

Abstract

Trade in feeder animals creates externalities when animal diseases can spread beyond the purchasing farm. If growers choose between open and closed production systems, then Nash equilibrium likely involves excessive trading. While first-best equilibrium involves market-wide adoption of either an open-trade or closed-farm system, equilibrium may entail heterogeneous systems. If so, then the feeder trade should be restricted. Supply response to an increase in marginal costs may be positive. Within a farm, infectious disease risk can create decreasing returns to scale when the technology is otherwise increasing returns. Contractual procurement and damage control technologies will likely increase scale in finishing. Copyright 2005, Oxford University Press.

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  • Helen H. Jensen, 2005. "Infectious Disease, Productivity, and Scale in Open and Closed Animal Production Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 900-917.
    • Handle: RePEc:oup:ajagec:v:87:y:2005:i:4:p:900-917
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    Cited by:

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    2. Hennessy, David A., 2012. "Economic Aspects of Agricultural and Food Biosecurity," Staff General Research Papers Archive 35015, Iowa State University, Department of Economics.
    3. Chitchumnong, Piyayut & Horan, Richard D., 2015. "Multiple Choices, Strategic Interactions, and Market Effects in Livestock Disease Risk Management," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205778, Agricultural and Applied Economics Association.
    4. Richard D. Horan & Eli P. Fenichel & David Finnoff & Carson Reeling, 2018. "A Portfolio-Balancing Approach to Natural Capital and Liabilities: Managing Livestock and Wildlife Diseases with Cross-Species Transmission," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(3), pages 673-689, July.
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    7. Rouvière, Elodie, 2016. "Small is beautiful: firm size, prevention and food safety," Food Policy, Elsevier, vol. 63(C), pages 12-22.
    8. Beard, Rodney, 2015. "Using a structural gravity model to assess the risk of livestock disease incursions in the UK," 150th Seminar, October 22-23, 2015, Edinburgh, Scotland 212668, European Association of Agricultural Economists.
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    10. Horan, Richard D. & Fenichel, Eli P. & Finnoff, David & Wolf, Christopher A., 2015. "Managing dynamic epidemiological risks through trade," Journal of Economic Dynamics and Control, Elsevier, vol. 53(C), pages 192-207.
    11. Gramig, Benjamin M. & Horan, Richard D., 2011. "Jointly determined livestock disease dynamics and decentralised economic behavior," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), pages 1-18, September.
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    14. Hennessy, David A. & Rault, Arnaud, 2023. "On systematically insufficient biosecurity actions and policies to manage infectious animal disease," Ecological Economics, Elsevier, vol. 206(C).

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    More about this item

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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