Tropentag, October 5 - 7, 2004 in Berlin "Rural Poverty Reduction through Research for Development and Transformation"

An Improved Framework for the Economic Analysis of Animal Disease Control using the Damage Abatement Function

¹University of Hannover, Economics and Business Administration, Germany
²International Livestock Research Institute (ILRI), Livestock & Human Health, Kenya

Abstract

Every student of animal health economics is familiar with the theoretical framework for analysing animal disease control developed at Exeter (UK) and summarised by McInerney (1996). In this framework, disease is viewed as a “negative input” generating losses within a livestock production function. The livestock keeper responds by investing in “positive inputs” of disease control, whether in terms of veterinary products and service or management practices. The trade-off between disease and its control can then be represented as a “loss-expenditure frontier” with the optimal level of disease control lying at the point on the frontier where the marginal value of losses equals the marginal cost of control.

Considering disease control as a typical positive input in the production function, whether for a single health problem or for general health care, is certainly intuitively appealing. More spent on veterinary care is expected to translate into higher productivity and income at the animal or herd level. This view is widely accepted and is nearly universally reflected in specifications of livestock production functions which take some variant of the form Q=ƒ(Z,X), where Q is some measure of output, Z is other inputs (feed, etc.), and X represents veterinary inputs. See, for example, a recent article incorporating livestock production into the agricultural household model (Chilonda and Van Huylenbroeck, 1999). A similar approach was long applied to modelling the use of pesticides on crops, but recent research has found this approach to be inappropriate. In response, an improved damage control framework has been developed in the pesticide literature. This paper draws from this literature to propose an improved framework for analysing livestock disease control in developing countries.

Keywords: Animal disease, damage abatement function, livestock, production function

Contact Address: Hermann Waibel, University of Hannover, Department of Economics and Business Administration, Königsworther Platz 1, 30167 Hannover, Germany, e-mail: waibelifgb.uni-hannover.de