A Model of Producer Incentives for Livestock Disease Management

We examine the management of livestock diseases from the producers’ perspective, incorporating information and incentive asymmetries between producers and regulators. Using a dynamic model, we examine responses to different policy options including indemnity payments, subsidies to report at-risk animals, monitoring, and regulatory approaches to decreasing infection risks when perverse incentives and multiple policies interact. This conceptual analysis illustrates the importance of designing efficient combinations of regulatory and incentive-based policies.