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An Optimal Surveillance Measure Against Foot-and-Mouth Disease in the United States

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  • Tom Kompas
  • Tuong Nhu Che
  • Pham Van Ha

Abstract

Surveillance programs on farms and in the local environment provide an essential protection against the importation and spread of exotic diseases. Combined with border quarantine measures, these programs protect both consumers and producers from major health concerns and disease incursions that can potentially destroy local agricultural production and supporting industries, as well as generate substantial losses in trade and tourism. However, surveillance programs also impose costs in the form of expenditures on the surveillance program itself, along with the costs of disease management and eradication should an incursion occur. Taking border quarantine expenditures as given, this paper develops a stochastic optimal control model (with a jumpdiffusion process) to determine the optimal level of surveillance activity against a disease incursion by minimizing the present value of the major direct and indirect costs of the disease, as well as the cost of the surveillance and disease management and eradication programs. The model is applied to the case of a potential entry and spread of FootandMouth Disease in the United States. Results show that current surveillance expenditures are far less than optimal.

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Bibliographic Info

Paper provided by International and Development Economics in its series International and Development Economics Working Papers with number idec06-11.

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Length: 23 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:idc:wpaper:idec06-11

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  1. 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.
  2. Chi, Junwook & Weersink, Alfons & Vanleeuwen, John A. & Keefe, Gregory P., 2001. "The Economics Of Controlling Infectious Diseases On Dairy Farms," Working Papers 34119, University of Guelph, Department of Food, Agricultural and Resource Economics.
  3. Zhao, Zishun & Wahl, Thomas I. & Marsh, Thomas L., 2006. "Invasive Species Management: Foot-and-Mouth Disease in the U.S. Beef Industry," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 35(1), April.
  4. Anderson, Kym & James, Sarah, 1998. "On the Need for More Economic Assessment of Quarantine/SPS Policies," CEPR Discussion Papers 1934, C.E.P.R. Discussion Papers.
  5. J. D. Mumford, 2002. "Economic issues related to quarantine in international trade," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 29(3), pages 329-348, July.
  6. Saphores, Jean-Daniel M. & Shogren, Jason F., 2005. "Managing exotic pests under uncertainty: optimal control actions and bioeconomic investigations," Ecological Economics, Elsevier, vol. 52(3), pages 327-339, February.
  7. John Mclnerney, 1996. "Old Economics For New Problems -Livestock Disease: Presidential Address," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1-4), pages 295-314.
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