Infectious Disease, Productivity, and Scale in Open and Closed Animal Production Systems
Jutta Roosen () and
Helen Jensen ()
Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University
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.
Keywords: feeder trade; industrialization; information; Nash equilibrium; vertical integration; welfare; food safety. (search for similar items in EconPapers)
JEL-codes: D62 H23 L22 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
http://www.card.iastate.edu/publications/DBS/PDFFiles/04wp367.pdf Full Text (application/pdf)
http://www.card.iastate.edu/publications/synopsis.aspx?id=530 Online Synopsis (text/html)
Journal Article: Infectious Disease, Productivity, and Scale in Open and Closed Animal Production Systems (2005)
Working Paper: Infectious Disease, Productivity, and Scale in Open and Closed Animal Production Systems (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:ias:cpaper:04-wp367
Access Statistics for this paper
More papers in Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University Contact information at EDIRC.
Series data maintained by ().