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Abstract
We use two methodological approaches to analyze avian influenza related
quarantine measures. First, a Heckman type gravity model is used to estimate
the trade impact and second, a spatial partial equilibrium simulation model is
developed to simulate welfare changes. The simulation model considers spread
and transmission risk according to the disease status of the importing country
as well as parameter uncertainty of the calibrated coefficients by using a Monte
Carlo approach. The econometric results show that the principle of regionalization
is preferred to import trade bans for uncooked meat. The simulation results
verify the negative welfare impact of currently implemented regulatory
policies and indicate that significant trade diversion effects according to the
disease status of countries occur. The welfare results confirm that a trade ban
is not the most appropriate measure to address the infection risk resulting from
the spread of the avian influenza virus.