Economic Appraisal of Animal Disease Revisited

Abstract

To select efficient and effective option of animal disease control, economic appraisal helps both farm manager and regional or national authority. Economic appraisal can be thought as a comparison among two or more options or states, one of which is regarded as benchmark. Even good deals of economic appraisals of animal disease have done, its theoretical background is still unclear.
In this research, we tried to show the importance of the scope and the timing in calculating the cost of animal disease from economics and accounting point of view. We classified literatures published in Japan by their scope in terms of actor and costs. Then we reviewed whether they can be justified from theoretical and practical standpoint.
Main results are followings : firstly, what should be included in the cost depends on the scope and the timing of the appraisal. From theoretical point of view, to evaluate the economic loss of animal disease, we should focus on accounting cost that includes wasted capital invested on diseased animals. On the other hand, to evaluate the economic efficiency of disease control options, opportunity cost should be included as its cost. Existing literatures don't always fit to this framework, however, most of them can be justified for practical reason. Secondly, impact on market structure caused by animal disease or disease control should be taken into considerations. Increase in supply may not be accomplished without price drop, which has often been ignored in previous researches.