Advanced Search
MyIDEAS: Login to save this article or follow this journal

Livestock Disease Indemnity Design When Moral Hazard Is Followed by Adverse Selection

Contents:

Author Info

  • Benjamin M. Gramig
  • Richard D. Horan
  • Christopher A. Wolf

Abstract

Averting or limiting the outbreak of infectious disease in domestic livestock herds is an economic and potential human health issue that involves the government and individual livestock producers. Producers have private information about preventive biosecurity measures they adopt on their farms prior to outbreak (ex ante moral hazard), and following outbreak they possess private information about whether or not their herd is infected (ex post adverse selection). We investigate how indemnity payments can be designed to provide incentives to producers to invest in biosecurity and report infection to the government in the presence of asymmetric information. We compare the relative magnitude of the first- and second-best levels of biosecurity investment and indemnity payments to demonstrate the tradeoff between risk sharing and efficiency, and we discuss the implications for status quo U.S. policy. Copyright 2008, Oxford University Press.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://hdl.handle.net/10.1111/j.1467-8276.2009.01256.x
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 91 (2008)
Issue (Month): 3 ()
Pages: 627-641

as in new window
Handle: RePEc:oup:ajagec:v:91:y:2008:i:3:p:627-641

Contact details of provider:
Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202
Phone: (414) 918-3190
Fax: (414) 276-3349
Email:
Web page: http://www.aaea.org/
More information through EDIRC

Related research

Keywords:

Other versions of this item:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. A. Mitchell Polinsky & Steven Shavell, 1999. "The Economic Theory of Public Enforcement of Law," NBER Working Papers 6993, National Bureau of Economic Research, Inc.
  2. Dasgupta, Partha S & Hammond, Peter J & Maskin, Eric S, 1979. "The Implementation of Social Choice Rules: Some General Results on Incentive Compatibility," Review of Economic Studies, Wiley Blackwell, vol. 46(2), pages 185-216, April.
  3. Charles E. Hyde & James A. Vercammen, 1997. "Costly Yield Verification, Moral Hazard, And Crop Insurance Contract Form," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1-3), pages 393-407.
  4. Kuchler, Fred & Hamm, Shannon, 2000. "Animal disease incidence and indemnity eradication programs," Agricultural Economics, Blackwell, vol. 22(3), pages 299-308, April.
  5. Harris, Milton & Raviv, Artur, 1979. "Optimal incentive contracts with imperfect information," Journal of Economic Theory, Elsevier, vol. 20(2), pages 231-259, April.
  6. Richard D. Horan & Christopher A. Wolf, 2005. "The Economics of Managing Infectious Wildlife Disease," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(3), pages 537-551.
  7. Hennessy, David A., 2005. "Behavioral Incentives, Equilibrium Endemic Disease, and Health Management Policy for Farmed Animals," Staff General Research Papers 12489, Iowa State University, Department of Economics.
  8. Mahul, Olivier & Gohin, Alexandre, 1999. "Irreversible Decision Making in Contagious Animal Disease Control under Uncertainty: An Illustration Using FMD in Brittany," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 26(1), pages 39-58, March.
  9. Bicknell, Kathryn & Wilen, James E. & Howitt, Richard E., 1999. "Public policy and private incentives for livestock disease control," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 43(4), December.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Arnaud Rault & St├ęphane Krebs, 2011. "Catastrophic risk and risk management, what do we know about livestock epidemics? State of the art and prospects," Working Papers SMART - LERECO 11-05, INRA UMR SMART.
  2. Rault, Arnaud & Krebs, Stephane, 2011. "Livestock epidemics and catastrophic risk management: State of the art and prospects on economic dynamics," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114793, European Association of Agricultural Economists.
  3. Tong Wang & David A. Hennessy, 2012. "Modeling Interdependent Participation Incentives: Dynamics of a Voluntary Livestock Disease Control Program," Center for Agricultural and Rural Development (CARD) Publications 12-wp527, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  4. Kobayashi, Mimako & Melkonyan, Tigran A., 2011. "Strategic Incentives in Biosecurity Actions: Theoretical and Empirical Analyses," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(2), August.
  5. Niemi, Jarkko K. & Lyytikainen, Tapani & Sahlstrom, Leena & Virtanen, Terhi & Lehtonen, Heikki, 2009. "Risk Classification in Animal Disease Prevention: Who Benefits from Differentiated Policy?," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49307, Agricultural and Applied Economics Association.
  6. David A. Hennessy & Tong Wang, 2013. "Strategic Interactions Among Private and Public Efforts when Preventing and Stamping Out an Highly Infectious Animal Disease," Center for Agricultural and Rural Development (CARD) Publications 13-wp541, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  7. Saak, Alexander E., 2012. "Infectious Disease Detection with Private Information," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124732, Agricultural and Applied Economics Association.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:oup:ajagec:v:91:y:2008:i:3:p:627-641. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.