ECONOMIC BENEFITS OF ANIMAL TRACING IN THE CATTLE PRODUCTION SECTOR

One of the options to prepare for a potential outbreak of an infectious livestock disease is to initiate an animal tracking system, which would provide information on animal movements and facilitate disease management. This article examines the benefits of implementing an animal tracking system in the context of a simulated cattle disease outbreak with and without animal tracking. Estimates are provided for some of the losses that would be avoided with an animal tracking system if an infectious animal disease were introduced. The results show that the economic efficiency of an animal tracking system depends on such factors as inter herd contact rates, effectiveness of animal disease response actions, and the extent to which an animal tracking system decreases the time of tracing animal movements. In case of a highly infectious animal disease outbreak substantial economic losses could be avoided if an effective animal tracking system is implemented.Livestock Production/Industries,

Weather Forecast Based Conditional Pest Management: A Stochastic Optimal Control Investigation

In this paper, we examine conditional, forecast-based dynamic pest management in agricultural crop production given stochastic pest infestations and stochastic climate dynamics throughout the growing season. Using stochastic optimal control we show that correlation between forecast error for climate prediction and forecast error for pest outbreaks can be used to improve pesticide application efficiency. In the general setting, we apply modified Hamiltonian approach to discuss the steady state equilibrium. Given specific functional forms, a closed form solution can be found for the stochastic optimal control problem. Moreover, we find conditions for model parameters so that the optimal pesticide usage path will be monotonically increasing or decreasing in the correlation coefficient between climate forecast errors and pest growth disturbances.Pest Management, Stochastic Optimal Control, Production Economics,

Consumers' Willingness to Pay for Animal Welfare Attributes in Dairy Products: Evidence From Experimental Auctions

Consumer/Household Economics, Demand and Price Analysis, Livestock Production/Industries,

An economic exploration of prevention versus response in animal related bioterrorism decision making

Animal disease outbreaks either through deliberate terroristic act or accidental introductions present a serious economic problem. This work concentrates on the economics of choosing strategies to mitigate possible agricultural terrorism and accidental introduction events largely in the animal disease management setting. General economic issues and the economic literature related to agricultural terrorism broadly and animal disease concerns specifically are reviewed. Basic economic aspects, such as the economic consequences of outbreaks, costs and benefits of various mitigation strategies, and stochastic characteristics of the problem are discussed. A conceptual economic model is formulated to depict the animal disease outbreak related decision making process. The key element of this framework is the choice between ex ante versus ex post mitigation strategies. The decision of investing in preventative and/or responsive strategies prior to the occurrence of an event versus relying on response and recovery actions after an outbreak event needs careful consideration. Comparative statics investigations reveal that factors that affect this decision are event probability, and severity, as well as costs, benefits, and effectiveness of various mitigation strategies. A relatively simplified empirical case study is done analyzing the economic tradeoffs between and optimum levels of ex ante detection, as a form of prevention, and ex post slaughter, as a form of response. The setting chosen involves Foot and Mouth Disease management. Empirical investigation is done on the conditions under which it is economically more advantageous to invest in ex ante detection as opposed to relying just on ex post response. Results show that investment in ex ante activities becomes more advantageous as the probability and severity of an agricultural terrorism event increases, response effectiveness decreases, and costs of surveillance decrease. Also spread rate is found to play a key role in determining optimal combination of ex ante and ex post strategies with more done ex ante the faster the disease spread. Finally, an economic framework is posed for future work given availability of a more detailed epidemiologic model. Access to such a model will allow for incorporation of wider spectrum of strategies including numerous possibilities for prevention, detection, response and market recovery facilitation. The framework allows more localized options, multiple possible events and incorporation of risk aversion among other features

Solar Bait: How States Attract Solar Investments from Large Corporations

Past literature in solar adoption has focused primarily on households without significant attention to the potential of commercial properties as sites for solar generation. Herein we examine firms’ decisions to install solar panels on their properties using state-level data. We are interested in the effects of state-level characteristics, including policies and regulations, on firm decisions regarding solar investments. We find that state characteristics that influence the return-on-investment from solar installations, most notably solar intensity, are important for commercial adoption decisions. Further results suggest that certain state-level policies, in particular solar carve-outs in renewable portfolio standards, financing programs and tax breaks, can incentivize firms to install solar panels. The strongest result we observe across empirical specifications is that firm installation decisions are correlated with personal electric vehicle ownership rates. This may indicate a ‘green’ business marketing strategy, whereby firms install solar to improve their social responsibility image

Interstate Protectionism: The Case of Solar Renewable Energy Credits

Solar Renewable Energy Credits (SRECs) are financial instruments created by state policies to offer incentives for generating solar energy. In an effort to support in-state solar energy sectors and boost local employment opportunities, some states have closed off their SREC markets to out-of-state solar facilities. We examine the merits of such protectionist policy from the protectionist states perspective. We find that SREC market closure leads to higher in-state SREC prices, greater solar installation, and lower electricity prices. The study illustrates the economic incentives for protecting in-state SREC markets from out-of-state solar energy producers

Spatiotemporal Analysis of Prior Appropriations Water Calls

A spatiotemporal model is developed to examine prior appropriations–based water curtailment in Idaho’s Snake River Plain Aquifer. Using a 100 year horizon, prior appropriations–based curtailment supplemented with optimized water use reductions is shown to produce a spatial distribution of water use reductions that differs from that produced by regulatory curtailment based strictly on initial water right assignments. Discounted profits over 100 years of crop production are up to 7% higher when allocation is optimized. Total pumping over 100 years is 0.3%, 3%, and 40% higher under 1, 10, and 100 year prior appropriations–based regulatory curtailment, respectively

Economics analysis of mitigation strategies for FMD introduction in highly concentrated animal feeding regions

Outbreaks of infectious animal diseases can lead to substantial losses as evidenced by 2003 US BSE (Bovine Spongiform Encephalopathy) event with consequent loss of export markets, and the 2001 UK FMD (Foot and Mouth Disease) outbreak that has cost estimates in the billions. In this paper we present a linked epidemiologic-economic modeling framework which is used to investigate several FMD mitigation strategies under the context of an FMD outbreak in a concentrated cattle feeding region in the US. In this study we extend the literature by investigating the economic effectiveness of some previously unaddressed strategies including early detection, enhanced vaccine availability, and enhanced surveillance under various combinations of slaughter, surveillance, and vaccination. We also consider different disease introduction points at a large feedlot, a backgrounder feedlot, a large grazing herd, and a backyard herd all in the Texas High Plains. In terms of disease mitigation strategies we evaluate the economic effectiveness of: 1. Speeding up initial detection by one week from day 14 to day 7 after initial infection; 2. Speeding up vaccine availability from one week post disease detection to the day of disease detection; 3.Doubling post event surveillance intensity. To examine the economic implications of these strategies we use a two component stochastic framework. The first component is the epidemiologic model that simulates the spread of FMD as affected by control policies and introduction scenarios. The second component is an economics module, which calculates an estimate of cattle industry losses plus the costs of implementing disease control. The results show that early detection of the disease is the most effective mechanism for minimizing the costs of outbreak. Under some circumstances enhanced surveillance also proved to be an effective strategy.Livestock Production/Industries,