Health Economics & Outcome Research: Open Access

An Analysis of the Indirect Costs of Animal Health over Time

Ava Corbyn^{* *}Correspondence: Ava Corbyn, Editorial Office, Health Economics and Outcome Research, Brussels, Belgium, Email:

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Introduction

Threats posed by animal diseases include those to the economy, the environment, animal welfare, and public health. Increased mortality, lower output, control expenses, trade loss, declining market value, and food insecurity are all losses caused by livestock illnesses. Globally, in both industrialised and developing nations, the effects of livestock disease on the economy and society have been acknowledged. In order to support prevention and control actions for better animal health, it is crucial to quantify the economic effect of an animal disease epidemic.Animal diseases have both direct losses and indirect impacts on the economy. Many different economic sectors, including rural business and tourism, can be impacted by disease. Few studies, however, assess the whole monetary impact of illness outbreaks. In many cases, only farm costs are taken into account, excluding any indirect effects. Estimates of the economic consequences of animal disease run the risk of underestimating the actual costs of an outbreak by leaving out indirect costs. In order to fully comprehend the economic impact of animal disease outbreaks, indirect costs must be accounted for in economic disease cost frameworks. Because producers and policymakers need to be aware of the broader illness consequences to enhance animal health welfare methods and policy, this is crucial to the support of holistic decision-making of disease preventive and control strategies. If alternative policy options result in significantly different indirect cost outcomes and, thus, different decision-making than would otherwise be indicated, this will be especially crucial.

The definitions of direct and indirect costs of animal disease outbreaks vary across the literature, even when indirect costs are taken into account in the study. While some research specifically distinguish direct and indirect costs, some studies do not classify economic costs as either direct or indirect. The inconsistent definitions of direct and indirect costs highlighted in this non-exhaustive summary table make it challenging to estimate and analyse the financial effects of livestock illnesses. In particular, depending on the individual interpretation, the expenses associated with preventive and control are either allocated as direct costs or indirect costs. It is ambiguous and subjective to distinguish between the direct and indirect economic losses caused by animal diseases. Indirect cost data and an analytical framework are frequently lacking. Therefore, a more organised and systematic framework is required in order to calculate and evaluate the financial impact of animal diseases.

Conclusion

Presented a methodology for defining and calculating the indirect costs of an animal disease epidemic, or the financial losses sustained in markets after disease freedom is announced. A VECM, a useful tool for capturing market dynamics after a disease freedom or outbreak, was the time series model that was discovered. Overall, vaccination is preferable than a "cull only" FMD control strategy in terms of indirect costs. According to our research, indirect costs are more predictable when vaccination is utilised as opposed to culling and less unpredictable depending on the size of the initial vaccine stock. The evaluation of indirect costs helps to improve decision-making by adding to the total economic assessment of the expenses of an animal disease epidemic, which is frequently disregarded but essential. Future study should focus on overcoming the limitations imposed by data and analytical frameworks on indirect cost estimation. The framework provided can be used to estimate indirect costs more reliably in additional animal illness scenarios. The calculation of indirect costs is crucial for a more full picture of the expenses associated with animal disease outbreaks across case studies, which will help prioritise scarce resources and guide cost-sharing. Our indirect cost modelling methodology can be modified to simulate how future shifts in the political economy, like Brexit, may affect the price of animal disease outbreaks.