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

David Hennessy, Jutta Roosen and Helen Jensen

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: 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.

Date: 2004-07-15
New Economics Papers: this item is included in nep-agr
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Published in American Journal of Agricultural Economics, November 2005, vol. 87, pp. 900-917

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Related works:
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 (2005)
Working Paper: Infectious Disease, Productivity, and Scale in Open and Closed Animal Production Systems (2004)
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