Public Policy and Private Incentives for Livestock Disease Control

This article presents a dynamic bioeconomic model of livestock disease control that is unique in its integration of disease dynamics, inter-species interaction, control-induced migration, and individual optimising behaviour. Examination of the first-order conditions highlights why profit-maximising producers cannot be expected to eradicate disease. Results from an empirical application of the model confirm that the current mix of policies to control bovine tuberculosis in New Zealand is achieving lower levels of prevalence than would prevail in the absence of a national strategy. These policies do, however, appear to remove some of the individual incentive to control disease.