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Measuring Welfare Effects of an FMD Outbreak in the United States

Published online by Cambridge University Press:  28 April 2015

Philip L. Paarlberg ,
John G. Lee  and
Ann H. Seitzinger
Philip L. Paarlberg
Affiliation:
Department of Agricultural Economics, Purdue University, W Lafayette, IN
John G. Lee
Affiliation:
Department of Agricultural Economics, Purdue University, W Lafayette, IN
Ann H. Seitzinger
Affiliation:
Centers for Epidemiology and Animal Health, Veterinary Services, Animal, and Plant Health Inspection Service, U.S. Department of Agriculture, Fort Collins, CO
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Abstract

Questions have been raised regarding the economic costs of a foot-and-mouth disease (FMD) outbreak in the United States. This analysis examines how welfare changes are measured and argues that they must be decomposed by groups. Producers with animals quarantined and slaughtered because of FMD measure their welfare change using lost sales. Producers not quarantined measure their welfare change using producer surplus. The change in national sales revenue is accurate when the supply elasticity is low. Welfare changes for consumers also must be decomposed because the change in aggregate consumer surplus hides important shifts in welfare among groups of consumers.

Keywords

economic effectsfoot-and-mouth diseaselivestockmeatD60Q13Q17Q18
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 35 , Issue 1 , April 2003 , pp. 53 - 65
Copyright
Copyright © Southern Agricultural Economics Association 2003

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