Measuring Welfare Effects of an FMD Outbreak in the United States

Questions have been raised regarding the economic costs of food-and-mouth disease (FMD) outbreak in the United States. This analysis examines how welfare changes are measured and argues that they must be decomposed by groups. Producers with animals quarantined and slaughtered because of FMD measure their welfare change using lost sales. Producers not quarantined measure their welfare change using producer surplus. The change in national sales revenue is accurate when the supply elasticity is low. Welfare changes for consumers also must be decomposed because the change in aggregate consumer surplus hides important shifts in welfare among groups of consumers.


Issue Date:
2003-04
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/37832
Published in:
Journal of Agricultural and Applied Economics, Volume 35, Number 1
Page range:
53-65
Total Pages:
13
JEL Codes:
D60; Q13; Q17; Q18




 Record created 2017-04-01, last modified 2017-08-25

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