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

  • Helen H. Jensen

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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File URL: http://hdl.handle.net/10.1111/j.1467-8276.2005.00777.x
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Article provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 87 (2005)
Issue (Month): 4 ()
Pages: 900-917

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Handle: RePEc:oup:ajagec:v:87:y:2005:i:4:p:900-917
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  1. Junwook Chi & Alfons Weersink & John A. VanLeeuwen & Gregory P. Keefe, 2002. "The Economics of Controlling Infectious Diseases on Dairy Farms," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 50(3), pages 237-256, November.
  2. Topkis Donald M., 1995. "Comparative Statics of the Firm," Journal of Economic Theory, Elsevier, vol. 67(2), pages 370-401, December.
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  5. Richard Bennett, 2003. "The 'Direct Costs'of Livestock Disease: The Development of a System of Models for the Analysis of 30 Endemic Livestock Diseases in Great Britain," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 55-71.
  6. 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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  8. Skaggs, Rhonda K. & Acuna, Rene & Torell, L. Allen & Southard, Leland W., 2004. "Live Cattle Exports from Mexico into the United States: Where Do the Cattle Come From and Where Do They Go?," Choices, Agricultural and Applied Economics Association, vol. 19(1).
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