Infectious Disease, Productivity, and Scale in Open and Closed Animal Production Systems
Comparative advantage motivates large trade flows in feeder animals throughout the world. Trade creates externalities when animal diseases can spread beyond the purchasing farm. When growers can choose between open and closed production systems, Nash equilibrium will likely involve socially excessive trading. Supply response to an increase in marginal costs may be positive. While first-best involves marketwide adoption of either an open-trade or closed-farm system, equilibrium may entail heterogeneous systems. If this is the case, then the feeder trade should be banned. Within a farm, we show how risk of infectious disease can create decreasing returns to scale when the technology is otherwise increasing in returns to scale. Control of disease risk through bilateral contracts or damage-control technologies will increase scale of production in fattening, while better sorting in feeder animal markets will have ambiguous effects on scale.
|Date of creation:||Jul 2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (515) 294-1183
Fax: (515) 294-6336
Web page: http://www.card.iastate.edu/
More information through EDIRC
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.:
- Kremer, Michael, 1993. "The O-Ring Theory of Economic Development," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 551-75, August.
- Geoffard, Pierre-Yves & Philipson, Tomas, 1996.
"Rational Epidemics and Their Public Control,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(3), pages 603-24, August.
- Milgrom, Paul & Shannon, Chris, 1994.
"Monotone Comparative Statics,"
Econometric Society, vol. 62(1), pages 157-80, January.
- 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.
- 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.
- 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).
- Chi, Junwook & Weersink, Alfons & Vanleeuwen, John A. & Keefe, Gregory P., 2001.
"The Economics Of Controlling Infectious Diseases On Dairy Farms,"
34119, University of Guelph, Department of Food, Agricultural and Resource Economics.
- 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.
- Topkis Donald M., 1995. "Comparative Statics of the Firm," Journal of Economic Theory, Elsevier, vol. 67(2), pages 370-401, December.
When requesting a correction, please mention this item's handle: RePEc:ias:cpaper:04-wp367. 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: ()
If references are entirely missing, you can add them using this form.