An Equilibrium Analysis of Antibiotics Use and Replanting Decisions in Apple Production

Abstract

Antibiotics are used in fruit production to control fire blight, a bacterial disease of fruit trees that causes yield losses and eventually tree death. Fearing the development of widespread antibiotic resistance, scientists and public health officials are becoming increasingly concerned about antibiotics use in agriculture. A framework is developed for assessing the impacts of changes in tree damage risk following a ban on antibiotics use in the apple industry. Allowing for entry and exit, a long-run analysis of replanting dates and equilibrium prices is provided, as well as an estimate of the welfare impacts of a ban on antibiotics.