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Can Free-Riding Be Beneficial? Optimal Antimicrobial Use Under Free-Riding And Resistance Externalities

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Abstract

Over- or under-provision of antimicrobials in the livestock sector can be economically important in terms of livestock health, disease introduction and spread, and future costs of disease therapy. This paper examines optimal antimicrobial use under free-riding and resistance externalities in the context of small-holder farm households in developing countries, which are an important demographic in global food production. We first develop a model with free-riding incentives that elucidates the effects of free-riding on antimicrobial use given disease dynamics. We then add antimicrobial resistance as a dynamic constraint and compare the two models, examining several cases conditional on the extent of the aforementioned externalities. Our model suggests a strong potential for over-provision of antimicrobials when ignoring resistance dynamics. Policy implications are discussed in light of the animal health and disease control subsidy programs of the developing world as well as unregulated antimicrobial sales and use.

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  • Delmond, Anthony & Ahmed, Haseeb, 2018. "Can Free-Riding Be Beneficial? Optimal Antimicrobial Use Under Free-Riding And Resistance Externalities," Working Papers 2018-2, School of Economic Sciences, Washington State University.
    • Handle: RePEc:ris:wsuwpa:2018_002
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    References listed on IDEAS

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    1. Kingston, William, 2000. "Antibiotics, invention and innovation," Research Policy, Elsevier, vol. 29(6), pages 679-710, June.
    2. David A. Hennessy & Christopher A. Wolf, 2018. "Asymmetric Information, Externalities and Incentives in Animal Disease Prevention and Control," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(1), pages 226-242, February.
    3. Graeub, Benjamin E. & Chappell, M. Jahi & Wittman, Hannah & Ledermann, Samuel & Kerr, Rachel Bezner & Gemmill-Herren, Barbara, 2016. "The State of Family Farms in the World," World Development, Elsevier, vol. 87(C), pages 1-15.
    4. Silvia Secchi & Bruce A. Babcock, 2002. "Pearls before Swine? Potential Trade-Offs between the Human and Animal Use of Antibiotics," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(5), pages 1279-1286.
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    More about this item

    Keywords

    Antimicrobials; antibiotic resistance; free ridership; livestock farming; animal health;
    All these keywords.

    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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