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Animal health economics Flashcards

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1
Q

What is economics?

A

The science which studies human behaviour as a relationship between ends and scarce means which have alternative uses

The study of how scarce resources are or should be allocated

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2
Q

What does economics do?

A

Highlights how and why people make choices under conditions of scarcity and the results of such choices on society

Is about tradeoffs: Our needs are endless, but decisions to satisfy these needs are constrained by resource availability

Is about behaviour and incentives, and how these influence choice

Decisions are needed to allocate resources

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3
Q

What is needed to analyse and understand about human behaviour and economics?

A

What factors influence people’s decision-making

How people make decisions

What are the consequences of these decisions

How the interactions between people lead to a collective whole, e.g. consumption behaviour influencing the market price of a good

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4
Q

Which topics are economic tools used to study human behaviour applied to?

A

Markets

Health

Crime

Law

Genetics

etc.

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5
Q

What are some economics research questions on animal health, human health or One Health?

A

Want to make a change on my farm to control diseases, how do I know if it is probable?

What would be the economic impact of a government policy?

How do market structures influence choices for disease control?

How would markets react in the case of a health policy?

What are the incentives needed to mitigate AMR?

What is the value of a healthy ecosystem?

What is the impact of disease to the person/farm/industry/society?

What is the most economically efficient surveillance system?

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6
Q

Why is the well-being of people central in economics?

A

Builds on a desire to understand the processes by which people in society could be made better off, e.g. with better nutrition, health, education, life opportunities, general comfort

Which people?

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7
Q

What is political economy?

A

The interaction of the political and economic processes within a society

Power and wealth distribution

Influence of politics on the economy and vice versa

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8
Q

What are resources?

A

Means to create value

Like water, feed, land, Animals

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9
Q

What is value?

A

Goods and services

Food

Wool and Hide

Draft power and transport

Income

Protection and support

Company, sport and pleasure

Wealth and status

Culture

Ecosystems and biodiversity

Science and research

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10
Q

What happens to resources and value during disease?

A

More resources needed

Goods and services lost
Value loss

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11
Q

What is animal health economics?

A

Explains the value of animal health and welfare to people

Translates biological relationships into value relationships

Helps to define the impact of disease on our economy (production, animal welfare, output, trade, productivity, etc.)

Provides methods to capture and quantify values

Describes how human behaviour and relationships impact how we make decisions

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12
Q

How do we create value?

A

Processes of resource transformation into goods and services

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13
Q

What is the livestock product value chain?

A

A resource transformation process

Livestock farming

Add value

Processing

Add value

Retailing

Add value

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14
Q

What are the steps of the livestock product value chain?

A

START - CONCEPTION

Resources
- Land
- Labour
- Breeding stock
- Feed
- Buildings
- Machinery
- Equipment
- Vet and Med
- Management

Products
- Milk
- Meat
- Eggs
- Wool
- Hides and Skins
- Glands

Resources
- Land
- Labour
- Additives
- Buildings
- Machinery
- Equipment
- Management

Products
- Milk products
- Meat products
- Graded eggs
- Processed wool
- Hides and skins
- Pharmaceuticals

Resources
- Land
- Labour
- Buildings
- Machinery
- Equipment
- Management

Products
- Ready meals
- Various fresh meat products
- Various dairy products
- Canned goods
- Chilled or frozen goods
- Clothing, upholstery
- Medicines

END - FINAL CONSUMPTION

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15
Q

What are intermediate products?

A

Inputs to next stage of production

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16
Q

What is value?

A

The importance, worth, or usefulness people attach to something, reflecting their judgement of what is important in life

‘Benefits’ promote well-being and therefore create value

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17
Q

What is value based on?

A

Value can be monetary or non-monetary

Based on physical need and emotional want

Influenced by
- Individual tastes and preferences
- Personal ethics
- Culture
- Religious beliefs

Value is intangible, not amenable to direct observation by any of our five senses

BUT people reveal what they value, and how much, by behaviour which can be observed

This includes their economic behaviour, which determines the choices that they make about the use of scarce resources

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18
Q

What are the economic and social factors at play in equine influenza? How do they influence the disease dynamics?

A

Biosecurity

Events

Housing

Travel history

Vaccination status

etc

Lack of biosecurity, poor housing and no vaccination status = more disease

more events, more travel = more disease

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19
Q

How can species movements affect disease?

A

Increasing temps (climate change) may cause species to move to higher altitudes or different climates

Long-distance migrations may prevent the buildup of parasites, as migration routes may alter

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20
Q

What are some questions relating to disease control?

A

Which diseases should we control and to what extent?

What can be achieved within the budget? What is the initial investment needed?

Who would benefit and should bear or share the costs?

Is disease control worth it?

What benefits result from control? Do the disease control activities generate a net benefit?

What are incentives/disincentives for decisions that impact on disease?

How can we justify the use of resources for animal health?

How do we rationalise decisions on the allocation of resources for animal health?

How do we inform decisions on prioritisation of resources for animal health?

How does human behaviour impact on disease emergence, transmission and spread?

What does it cost if we control or if we don’t?

Is it profitable to eradicate a disease?

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21
Q

What is scarcity?

A

When resources are finite and limited

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22
Q

Which resources may become scarce?

A

Water

Land

Labour

Service provision (e.g. healthcare)

Seasonality

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23
Q

What is rational choice?

A

Individuals always make prudent and logical decisions that provide him with the greatest benefit or satisfaction

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24
Q

What assumptions are made with rational choice?

A

Individuals behave to obtain the most value from their action - they will maximise their personal advantage

Individuals rational choices benefit the economy overall

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25
What is the reality with rational choice?
Some spontaneity, adventure, unpredictability, and other factors that influence human behaviour
26
What information is required for rational choice?
Need to have information on both the costs and benefits to be able to compare them - A farmer deciding what and how much to produce - A dairy farmer planning the level of feeding for their heifers - The purchasing of food from a supermarket versus food obtained directly from a farm shop Involves choosing what will give the best value: ie, the greatest benefit relative to the cost Making rational decisions often requires trading off one item against another - There can be more than one rational choice
27
When does 'cost' exist?
When something is used that has valuee and is scarce
28
What is trade-off?
The decision to choose one option over another By choosing one, you give up the chance to do an alternative
29
What is opportunity cost?
The cost of what you sacrifice when choosing one option over another The lost value of other alternatives when one option is chosen
30
What is work and leisure as a trade-off?
The more time you spend at work, the higher you value leisure time Higher compensation is required for you to exchange one hour of leisure to an additional hour of working Working at weekends may carry a higher cost (opportunity cost) than working during office days because you have to give up more valuable time, such as time with your family or friends
31
What is production possibility frontier (PPF)?
Illustrates the concepts of opportunity costs and tradeoffs Economic growth pushes the curve outwards, contracture pulls it inwards
32
What is marginal?
An additional or incremental unit of something
33
Where are rational decisions commonly taken?
At the margin
34
What is marginality: Marginal analysis?
Economic decisions are made at the margin: They are made with an assessment of "marginal costs" and "marginal benefits" When we say marginal, we are only looking at the effect of a small, incremental, or single unit of change
35
Why does marginal analysis work?
In any situation, people want to maximise their net benefits Net benefit = total benefits - total costs Change in net benefit = marginal benefit - marginal cost When marginal benefits exceed marginal cost, net benefits go up
36
How do you calculate net benefit?
Net benefit = Total benefits - Total costs
37
How do you calculate a change in net benefit?
Change in net benefit = marginal benefit - marginal cost
38
What happens when marginal benefits exceed marginal cost?
Net benefits go up
39
What should you do if the marginal benefit from another unit of activity exceeds its marginal cost?
You should undertake that extra unit of activity
40
What should you do if marginal cost exceeds its marginal benefit?
Reduce the level of an activity
41
Why is marginal analysis useful?
Helps people to allocate their scarce resources to maximise the benefit of the output produced Using marginal analyses, you can determine the behaviour that will maximise the profit, minimise the cost, maximise utility or maximise social welfare Goes beyond total costs or returns
42
What are the steps in marginal analysis?
1. Identify the variable to change, example: Employ another baker 2. Determine what the increase in total benefits would be if one more unit of the variable were added = marginal benefit of the added unit, example: Number of additional cakes made 3. Determine what the increase in total cost would be if one more unit of the variable were added = marginal cost of the added unit, example: Additional cost of new cook
43
What are economic actors?
Different groups in society will have different goals and their access to resources is often unequal. If an economic analysis intends to decide on the 'best' allocation of resources so we have to clarify: - Whose point of view will be considered - How is their point of view being included? - Who conceived the analytical frameworks? - Who is making decisions based on the results of the analysis?
44
Economic actors can have different objectives. What could these objectives be?
Minimise costs, e.g. if only a limited quantity can be produced Maximise profit (=revenue minus costs) Maximising production or health may not maximise profit Maximise utility, i.e. happiness that one can get by consuming goods, given their resources (e.g. income) available to get the goods Maximise animal welfare
45
What is the private sector?
Part of the economy that is run by individuals and companies for profit and is not state controlled
46
What is the public sector?
Part of the economy that is run by the federal, state or local government to provide infrastructure and public goods
47
What is a private good?
Something that must be purchased to be consumed, and consumption by one individual prevents another individual from consuming it
48
What is a public good?
Something that is non-excludable - it is not possible to stop others from using it, whether they have paid for it or not Non-rivalrous - use by one person does not restrict access nor reduce what is available
49
What are some examples of a public good?
Law enforcement National security National infrastructure
50
What is an externality?
An externality is a cost, or a benefit arising from an economic transaction that falls on a third party and is not taken into account by those who undertake the transaction Reflects the difference between private and social values
51
What is happening if a farmer makes analysis and decides it is too costly to implement further biosecurity measures on his/her farm?
Private costs > Private benefits A rational choice
52
What is happening if a neighbouring farmer suffers disease outbreak because of Farmer 1's decision?
Social costs = externality
53
What are externalities?
Beneficial or harmful side effects borne by third parties that arise from disease control
54
What are some examples of externalities?
Effects on the natural resource base: Higher animal numbers and subsequent higher grazing pressure may lead to soil degradation, which would require a value to be placed on the land that would be lost Income of other groups may be affected: A government disease control project may affect private practice incomes Access to new markets for all produces within a sector due to eradication of a trade-limiting disease from some few affected farms or areas Human lives, health and welfare that cannot be valued in monetary terms, but which may be affected by disease control activities (e.g. reduced rural morbidity and mortality due to reduction in the incidence of brucellosis)
55
Human behaviour influences disease control, what questions lead to this influence?
Who must do what to control disease? How are the benefits and costs shared? Who should pay? What are the incentives? What is the likelihood of non-compliance?
56
What questions can we ask to understand and predict people's response and behaviour related to animal disease and its control?
What factors influence people's decision working? What are the consequences of these actions? How do the interactions between people lead to a collective whole e.g. consumption behaviour influencing market price of a good?
57
How can disease control strategies only be effective?
If they take into account people's motivations Culling to limit disease spread is a very efficient tool for the whole society, but may be a big loss to an individual owner who may try to avoid it by all means Many different methods and frameworks used to achieve this
58
What is rational choice?
Is when a person make a decision that generates the greatest benefit relative to cost
59
What is tradeoff?
Involves a sacrifice that must be made to obtain a certain product, rather than others that could be obtained using the same resources
60
What is opportunity cost?
The value of the second-best alternative that has to be given up to choose the first-best alternative
61
What is marginality?
Looks at small incremental steps in the analysis
62
What are public goods?
Non-rivalrous and non-excludable
63
What are externalities?
Costs or benefits arising from an economic transaction that fall on a third party
64
What is human behaviour change?
Principles are important throughout economics
65
How do we make an economic impact assessment?
Economic costs of disease - What are the real costs of disease Value loss caused by disease Cost of surveillance, prevention and disease control interventions Various frameworks help us to conceptualise the economic impact of disease
66
What do economic impact assessments do?
Used to justify and evaluate disease control programmes Enable comparisons between diseases and animal health systems
67
What are some invisible losses caused by disease?
Fertility problems Change in herd structure Delay in the sale of animals and products Public health costs High prices for livestock and livestock products
68
What are some visible losses caused by disease?
Dead animals Thin animals Animals poorly developed Low returns Poor quality products
69
What are some expenditures (additional costs) caused by a reaction to disease?
Medicines Vaccines Insecticide Time Treatment of products
70
What are some expenditures (revenue foregone) caused by a reaction to disease?
Access to better markets is denied Sub-optimal use of technology
71
If health problems are significantly problematic, there may be impact on what?
Trade Movement of people Limit people's ability to work and do business Limit animal production Death of people and animals
72
What does elimination of disease essentially eliminate?
Disease losses Disease treatment and response costs
73
However, with the exception of smallpox and rinderpest, what costs remain despite elimintion of disease?
Surveillance for detection A capacity to respond in the case of an outbreak
74
What are the options for disease mitigation?
Vaccination Treatment Movement controls Testing and culling Quarantine Selective breeding
75
What are the questions when choosing a method of disease mitigation?
Is it effective? Is is acceptable? Is it cost-effective?
76
What is economic evaluation?
Compares at least two options to identify if there is a net economic benefit or cost Where avoidable losses are greater than the costs of a change in disease status, the investment is worthwhile
77
What is comparative analysis?
Comparison of at least two alternative strategies Identification, examination and valuation of their inputs and consequences (outcomes) inputs --> outputs inputs --> outputs Measure - Value - Compare
78
What do you need to do when comparing losses with and without intervention?
Need to think about what happens with the intervention But also what happens without the intervention Requires making projections for a prospective (ex-ante) analysis
79
What is cost-benefit analysis?
Expresses both the costs and the outcomes in monetary terms Aim is to find alternative that produces the highest net benefit This type of analysis allows the broadest comparison of programmes - everything can be compared to everything (even with other government programmes in education, environment etc.) Example: Cost-benefit analysis of a national control programme for brucellosis, compared with a do-nothing option Problems: Difficult to measure all the outcomes (e.g. ecosystem services) in monetary terms
80
What do cost-effectiveness analysis and cost-utility analysis do?
Estimate cost and outcomes of a strategy of intervention Expresses outcomes in natural units (e.g. cases prevented, lives saved) In health economics, it compares results with other interventions affecting the same outcome Cannot combine different effects that may have different meanings
81
What is cost-effectiveness ratio?
Cost programme - cost alternative Divided by Effect programme - effect alternative
82
When do we use cost-utility analysis?
Where the effects are quality adjusted life years (QALY) or disability adjusted life years (DALY)
83
What is cost-utility ratio?
Cost programme - cost alternative Divided by Utility programme - utility alternative
84
What are disability adjusted life years (DALY)?
A health outcome measure used by the Global Burden of disease study with two main components - Lifetime lost due to premature mortality - Quality of life reduced due to a disability One DALY is equal to one year of healthy life lost
85
How do you calculate DALY?
DALY = Years of life lost due to premature mortality + Years lived with disability
86
What economic evaluation should be used if: - There is no comparison of 2 or more alternatives - Both costs and consequences of the alternatives are not examined - Only consequences are examined?
Outcome Description
87
What economic evaluation should be used if: - There is no comparison of 2 or more alternatives - Both costs and consequences of the alternatives are not examined - Only costs are examined?
Cost description
88
What economic evaluation should be used if: - There is no comparison of 2 or more alternatives - Both costs and consequences of the alternatives are examined?
Cost-Outcome description
89
What economic evaluation should be used if: - There is comparison of 2 or more alternatives - Both costs and consequences of the alternatives are not examined - Only consequences are examined?
Effectiveness evaluation
90
What economic evaluation should be used if: - There is comparison of 2 or more alternatives - Both costs and consequences of the alternatives are not examined - Only cost is examined?
Cost analysis (cost minimisation analysis)
91
What economic evaluation should be used if: - There is comparison of 2 or more alternatives - Both costs and consequences of the alternatives are examined?
Cost-effectiveness analysis Cost-utility analysis Cost-benefit analysis

Epidemiology (11 decks)

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