Jointly-Determined Livestock Disease Dynamics and Decentralized Economic Behavior

We develop a dynamic model of livestock disease and decentralized economic behavior as a jointly-determined system. By accounting for feedbacks between behavioral choices and disease outcomes we capture the endogenous nature of infection risks. We consider government mandated testing of livestock herds and how private biosecurity incentives are affected by the structure of disease eradication polices. How well disease control policies are targeted affects their effectiveness and may result in farmers substituting government testing and disease surveillance for private biosecurity. Numerical simulation results demonstrate that failing to account for feedbacks between disease and economic dynamics may underestimate the level of infection. Not accounting for behavioral responses to infection risks may overestimate the effectiveness of government disease control policies.