Economics of Informed Antibiotic Management and Judicious Use Policies in Animal Agriculture

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Date
2024-04-22
Authors
Jia, Yanan
Hennessy, David
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Springer
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Feng, Hongli
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Economics

The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).

History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.

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1898–present

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  • Department of Economic Science (1898–1910)
  • Department of Economics and Political Science (1910-1913)
  • Department of Applied Economics and Social Science (1913–1924)
  • Department of Economics, History and Sociology (1924–1931)
  • Department of Economics and Sociology (1931–1967)

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Center for Agricultural and Rural Development

The Center for Agricultural and Rural Development (CARD) conducts innovative public policy and economic research on agricultural, environmental, and food issues. CARD uniquely combines academic excellence with engagement and anticipatory thinking to inform and benefit society.

CARD researchers develop and apply economic theory, quantitative methods, and interdisciplinary approaches to create relevant knowledge. Communication efforts target state and federal policymakers; the research community; agricultural, food, and environmental groups; individual decision-makers; and international audiences.

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Abstract
Antibiotic effectiveness can be viewed as a biological commons since current use may decrease future effectiveness. The value of the biological commons declines when the targeted bacteria develop antibiotic resistance. Antibiotic resistance is a global threat to health and development, causing serious economic damage and loss of human lives. The greatest share of antibiotics is used in livestock production, leading to concerns that such use may threaten human health. While various policies are in place to promote judicious use of antibiotics, their effectiveness is unclear. One key challenge in antibiotics management is the uncertainty surrounding the various decisions related to antibiotics use, including whether a suspect case has an infection, how likely an infection will spread, and how effective antibiotics can be if used. We develop a disease management model that incorporates linkages among diagnostic testing decisions, antibiotic use decisions, and alternative treatment costs. We show that many unintended consequences may arise from policies designed to promote judicious antibiotic use. Antibiotics and self-tests are complements (substitutes) when antibiotic cost is high (low), implying that a self-test subsidy can plausibly increase expected antibiotic use. With regard to a prescription regulation (PR) that switches an antibiotic from over-the-counter to prescription, we show that, although PR can reduce therapeutic antibiotic use as intended, it may not achieve the social optimum. In a simple real-world application, we find that PR induces excessive veterinary service demand but does not reduce antibiotic use among typical U.S. dairy farms. PR also leads to the substitution of veterinary services for self-tests in obtaining information. We discuss how our analytical framework can be applied to other contexts, including antibiotics for human use.
Comments
JEL Codes: Q570, D830, Q180, Q120, I18
This is a manuscipt of an article published as Jia, Y., Hennessy, D. & Feng, H. Economics of Informed Antibiotic Management and Judicious Use Policies in Animal Agriculture. Environ Resource Econ (2024). https://doi.org/10.1007/s10640-024-00862-1. © The Author(s), under exclusive licence to Springer Nature B.V. 2024. Posted with permission.
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