IDEAS home Printed from https://ideas.repec.org/p/ias/cpaper/05-wp418.html

Behavioral Incentives, Equilibrium Endemic Disease, and Health Management Policy for Farmed Animals

Author

Abstract

We develop a dynamic capital valuation model in which each farm can take an action with farm-varying cost to increase the probability of not contracting a disease. In the presence of infection externalities, circumstances are identified under which multiple equilibria exist and where the one involving the most extensive set of action takers is socially optimal. It is suggested that costly capital markets are one factor in determining the extent of endemic disease in a region. The introduction of frictions, such as dealing with a cumbersome veterinary public health bureaucracy, can enhance social welfare by encouraging precautionary biosecurity actions. Some technical innovations can reduce social welfare. The model is also extended to study a voluntary herd depopulation scheme. Moral hazard in the biosecurity action will dampen the scheme's welfare effect.

Suggested Citation

  • David A. Hennessy, 2005. "Behavioral Incentives, Equilibrium Endemic Disease, and Health Management Policy for Farmed Animals," Center for Agricultural and Rural Development (CARD) Publications 05-wp418, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    • Handle: RePEc:ias:cpaper:05-wp418
    as

    Download full text from publisher

    File URL: https://www.card.iastate.edu/products/publications/pdf/05wp418.pdf
    File Function: Full Text
    Download Restriction: no
    File URL: https://www.card.iastate.edu/products/publications/synopsis/?p=883
    File Function: Online Synopsis
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

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


    Cited by:

    1. Benjamin M. Gramig & Richard D. Horan, 2011. "Jointly determined livestock disease dynamics and decentralised economic behaviour," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), pages 393-410, July.
    2. Pablo Valdes-Donoso & Lovell S Jarvis, 2022. "Combining epidemiology and economics to assess control of a viral endemic animal disease: Porcine Reproductive and Respiratory Syndrome (PRRS)," PLOS ONE, Public Library of Science, vol. 17(9), pages 1-20, September.
    3. Benjamin M. Gramig & Richard D. Horan & Christopher A. Wolf, 2008. "Livestock Disease Indemnity Design When Moral Hazard Is Followed by Adverse Selection," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(3), pages 627-641.
    4. Ma, Meilin & Delgado, Michael S. & Wang, H. Holly, 2024. "Risk, arbitrage, and spatial price relationships: Insights from China's hog market under the African Swine Fever," Journal of Development Economics, Elsevier, vol. 166(C).
    5. David A. Hennessy, 2013. "Biosecurity Externalities and Indemnities for Infectious Animal Diseases," Center for Agricultural and Rural Development (CARD) Publications 13-wp539, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    6. K. Aleks Schaefer & Daniel P. Scheitrum & Steven van Winden, 2022. "Returns on investment to the British bovine tuberculosis control programme," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(2), pages 472-489, June.
    7. repec:isu:genstf:201201010800003982 is not listed on IDEAS
    8. Rat-Aspert, Olivier & Krebs, Stephane, 2013. "Économie des actions collectives de maîtrise des maladies animales endémiques. Proposition d’un cadre d’analyse," Économie rurale, French Society of Rural Economics (SFER Société Française d'Economie Rurale), vol. 338(November-).
    9. Xie, Fang & Horan, Richard D., 2008. "Disease and Behavioral Dynamics for Brucellosis in Elk and Cattle in the Greater Yellowstone Area," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6404, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Cariappa, A G Adeeth & Chandel, B S & Sankhala, Gopal & Mani, Veena & R, Sendhil & Dixit, Anil Kumar & Meena, B S, . "Anionic mineral mixture prevents milk fever and improves farmer income: evidence from a randomized controlled trial," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 35(01).
    11. A. G. Adeeth Cariappa & B. S. Chandel & Gopal Sankhala & Veena Mani & Sendhil R & Anil Kumar Dixit & B. S. Meena, 2021. "Prevention Is Better Than Cure: Experimental Evidence From Milk Fever Incidence in Dairy Animals of Haryana, India," Papers 2106.03643, arXiv.org.
    12. Jarkko K. Niemi & Leena Sahlström & Jonna Kyyrö & Tapani Lyytikäinen & Alina Sinisalo, 2016. "Farm characteristics and perceptions regarding costs contribute to the adoption of biosecurity in Finnish pig and cattle farms," Review of Agricultural, Food and Environmental Studies, Springer, vol. 97(4), pages 215-223, December.
    13. Tong Wang & Seong Cheol Park, 2014. "Livestock Disease Indemnity Design under Common Uncertainty: A Multi-agent Problem," Economics Bulletin, AccessEcon, vol. 34(3), pages 1396-1409.
    14. Boni, Maciej F. & Galvani, Alison P. & Wickelgren, Abraham L. & Malani, Anup, 2013. "Economic epidemiology of avian influenza on smallholder poultry farms," Theoretical Population Biology, Elsevier, vol. 90(C), pages 135-144.
    15. Niemi, Jarkko K. & SahlströmJonna, Leena & Lyytikäinen, KyyröTapani & Sinisalo, Alina, 2016. "Farm characteristics and perceptions regarding costs contribute to the adoption of biosecurity in Finnish pig and cattle farms," Review of Agricultural, Food and Environmental Studies, Institut National de la Recherche Agronomique (INRA), vol. 97(4).
    16. Xie, Fang & Horan, Richard D., 2009. "Disease and Behavioral Dynamics for Brucellosis Control in Elk and Cattle in the Greater Yellowstone Area," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(01), pages 1-23.
    17. Tong Wang & David A. Hennessy, 2015. "Strategic Interactions Among Private and Public Efforts When Preventing and Stamping Out a Highly Infectious Animal Disease," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(2), pages 435-451.
    18. Hennessy, David A. & Rault, Arnaud, 2023. "On systematically insufficient biosecurity actions and policies to manage infectious animal disease," Ecological Economics, Elsevier, vol. 206(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • H4 - Public Economics - - Publicly Provided Goods
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ias:cpaper:05-wp418. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/caiasus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.