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Measuring Welfare Effects of an FMD Outbreak in the United States

Author

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  • Paarlberg, Philip L.
  • Lee, John G.
  • Seitzinger, Ann Hillberg

Abstract

Questions have been raised regarding the economic costs of food-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.

Suggested Citation

  • Paarlberg, Philip L. & Lee, John G. & Seitzinger, Ann Hillberg, 2003. "Measuring Welfare Effects of an FMD Outbreak in the United States," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 35(1), pages 1-13, April.
    • Handle: RePEc:ags:joaaec:37832
    DOI: 10.22004/ag.econ.37832
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    Cited by:

    1. Sayed H. Saghaian & Leigh J. Maynard & Michael R. Reed, 2007. "The effects of E. coli 0157:H7, FMD and BSE on Japanese retail beef prices: A historical decomposition," Agribusiness, John Wiley & Sons, Ltd., vol. 23(1), pages 131-147.
    2. Saghaian, Sayed H. & Reed, Michael R., 2007. "Consumer Reaction to Beef Safety Scares," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 10(1), pages 1-19.
    3. Kobayashi, Mimako & Howitt, Richard E. & Carpenter, Tim E., 2006. "Investment in Infectious Disease Control Capacity: The Case of a Potential Foot-and-Mouth Disease Outbreak in California," 2006 Annual meeting, July 23-26, Long Beach, CA 21049, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Carrasco, L. Roman & Cook, David & Baker, Richard & MacLeod, Alan & Knight, Jon D. & Mumford, John D., 2012. "Towards the integration of spread and economic impacts of biological invasions in a landscape of learning and imitating agents," Ecological Economics, Elsevier, vol. 76(C), pages 95-103.
    5. Yeboah, Godfred & Maynard, Leigh J., 2004. "The Impact Of Bse, Fmd, And U.S. Export Promotion Expenditures On Japanese Meat Demand," 2004 Annual meeting, August 1-4, Denver, CO 19978, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Peter R. Tozer & Thomas. L. Marsh & Evgeniy V. Perevodchikov, 2015. "Economic Welfare Impacts of Foot-and-Mouth Disease in the Canadian Beef Cattle Sector," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 63(2), pages 163-184, June.
    7. Paarlberg, Philip L. & Lee, John G. & Seitzinger, Ann Hillberg, 2005. "Economic Modeling of Livestock Disease Outbreaks," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 8(1), pages 1-16.

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