Title

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

Campus Units

Economics, Center for Agricultural and Rural Development

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

11-2005

Journal or Book Title

American Journal of Agricultural Economics

Volume

87

Issue

4

First Page or Article ID Number

900

Last Page

917

DOI

10.1111/j.1467-8276.2005.00777.x

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.

JEL Classification

L22, Q12, Q16

Comments

This is a working paper of an article from American Journal of Agricultural Economics 87 (2005): 900, doi: 10.1111/j.1467-8276.2005.00777.x.