Free-Range Farming and the Optimal Public and Private Responses to a Possible Epidemic

21 Pages Posted: 22 Feb 2009

See all articles by Sajal Lahiri

Sajal Lahiri

Southern Illinois University Carbondale - Department of Economics

Basharat Pitafi

Southern Illinois University at Carbondale - Department of Economics

Date Written: February 17, 2009

Abstract

We develop an optimizing model of a farm that is subject to invasion by an infectious disease such as bird flu, where the probability of invasion depends on the degree of free-ranging on the farm and post-invasion rate of spread on the farm depends on the farm size, the farmer's surveillance efforts, and the degree of free-ranging. We examine optimal policies for the farm and for the government, and analyze how these policies are affected by the degree of free-ranging. We find, inter alia, that when the farm size is endogenous fining an infected farm is superior as an instrument than providing it a rebate on costs, but when the farm size is exogenous the two instruments are equivalent. We also find that optimal surveillance effort, farm size, and fines are smaller for free-range farms when costs are sensitive to the degree of free-ranging.

Keywords: Avian Influenza, H5N1, Foot-and-Mouth Disease, Aphtae epizooticae, Mad Cow Disease, BSE,Invasive Species, Organic Farming

JEL Classification: Q12, Q18, I18, H32

Suggested Citation

Lahiri, Sajal and Pitafi, Basharat, Free-Range Farming and the Optimal Public and Private Responses to a Possible Epidemic (February 17, 2009). Available at SSRN: https://ssrn.com/abstract=1345158 or http://dx.doi.org/10.2139/ssrn.1345158

Sajal Lahiri (Contact Author)

Southern Illinois University Carbondale - Department of Economics ( email )

MC 415
1000 Faner Drive
Carbondale, IL 62901
United States

Basharat Pitafi

Southern Illinois University at Carbondale - Department of Economics ( email )

Mail Code 4515
Carbondale, IL 62901-4515
United States

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