Journal Article

Irreversible decision making in contagious animal disease control under uncertainty: an illustration using FMD in Brittany

O Mahul and A Gohin

in European Review of Agricultural Economics

Volume 26, issue 1, pages 39-58
Published in print March 1999 | ISSN: 0165-1587
Published online March 1999 | e-ISSN: 1464-3618 | DOI: http://dx.doi.org/10.1093/erae/26.1.39
Irreversible decision making in contagious animal disease control under uncertainty: an illustration using FMD in Brittany

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The concept of irreversible investment is applied to highly contagious animal disease control when uncertainty about the spread of the disease is resolved over time. In comparison with the strategy of destroying infected herds, the vaccination programme causes additional losses that cannot be recovered. These sunk costs are thus irreversible. Therefore, the gain from waiting for new information, namely the quasi-option value, should induce animal health authorities to delay the decision to vaccinate if the probability of a widespread epidemic is not too high. A numerical example is developed for foot and mouth disease (FMD) in Brittany.

Keywords:contagious animal disease, irreversible control strategy, foot and mouth disease, gain from waiting

Journal Article.  0 words. 

Subjects: Agricultural Economics ; Environmental Economics ; Renewable Resources and Conservation ; Primary Products

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