The Economics of Livestock Health, Disease, and Production

Alexander J Kappes

doi:10.7273/000005494

The economic implications of livestock health and disease have wide-ranging effects across commercialized production systems in developed markets and household production and consumption in underdeveloped markets. Chapter 1 focuses on livestock health in developed markets. Chapters 2 and 3 focus on the intersection between human and livestock health in underdeveloped markets. In Chapter 1 I develop a theoretical environment that evaluates how asymmetric information on calf health impacts producer welfare in the supply chain. I propose a price premium mechanism consistent with contract theory for revealing private health information and find theoretical profit-maximizing conditions. I empirically test theoretical conditions using commercial feedlot data in a simulated environment and find support for theoretical conditions. In Chapter 2 I evaluate household, socioeconomic, and environmental impacts on child height growth in Western Kenya, which is a determinant of health. With individual nutritional intake and height data I estimate height growth efficiency using data envelopment analysis, and then use supervised machine learning methods to determine associated impacts of features on height growth efficiency. I find that optimal labor and land resource allocation decisions are important for increasing height growth efficiency, as well as household educational attainment and having access to electricity and reliable water. In chapter 3 I evaluate impacts of livestock health on livestock production and welfare for agricultural households in Western Kenya. I estimate livestock production inefficiency using stochastic frontier analysis and then normally approximate a probability model in a Bayesian environment. I use the probability model to determine associated odds of production becoming more inefficient during decreased livestock health events. I construct a counterfactual environment with healthy livestock and efficient production, and estimate welfare loss attributed to decreased livestock health for a representative household using information from the probability model. I find that general livestock illness, as well as livestock respiratory or skin diseases are associated with increased production inefficiency. I also find that during livestock illness events, households having no education is associated with even greater production inefficiency. Welfare loss results reveal that sizable market imperfections due to decreased livestock health exist in representative underdeveloped areas.

The Economics of Livestock Health, Disease, and Production

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