Interaction with Natural Resources

Decrease in productivity occurs over time as a result of biological processes known as resistance to pesticides and pest resurgence. Agricultural producers will adjust their practices to this productivity decline. For instance, pesticide demand increases with rising levels of resistance (Carlson 1977). However, the reaction of the producer to increase the rate of an input factor whose marginal productivity declines is contradictory to economic rationale when applying a conventional production...

The Static Analysis of Laxminarayan and Weitzman

Laxminarayan and Weitzman have provided us with a short, thought-provoking analysis on the optimal way to treat a single kind of bacterial infection afflicting a group of patients when several antibiotics exist, each of which could cure a patient at a different cost. According to the authors, current medical practice involves treating patients uniformly with the same antibiotic the cheapest available after full account is taken of the bacteria's susceptibility to each drug. If increasing...

Economic Effects of Resistance When Does Resource Conservation

The emergence of resistance of pests, weeds, or diseases against a pest control agent is a process of the depletion of a naturally inherent resource that is the susceptibility toward the specific mode of action of the pest control agent. Pest susceptibility thus can be treated as a biological capital (Hueth and Regev 1974). Several biological factors determine resistance development the initial frequency of resistant individuals in a pest population, the target mode of the pest control agent,...

David H Howard and Kimberly J Rask

It is widely recognized that patterns of antimicrobial use affect prevailing rates of resistance. Less often noted is that, in some cases, resistance will affect prescribing patterns. The first relationship is driven by the biological process of natural selection, the second is driven by physicians' rational behavioral responses to a changing environment. When presented with a patient, a physician must estimate for every available antibiotic the probability that the patient's infection will be...

Resistance and Empiric Substitution

Before computing Equation 4, we validated the model by comparing predicted and actual market shares. Figure 5-2 displays actual market shares (the bars) and predicted market shares, D(R, pj, xj, 8), as well as the 95 confidence intervals based on 100 bootstrap runs. A single simulation run entails (a) drawing the bk's and sk's from their respective distributions, (b) drawing ar's from triangle distributions, (c) drawing e 's from independent logistic distributions, (d) computing utility levels...

The Data

Our main data source was the National Ambulatory Medical Care Survey (NAMCS). For selected years before 1989 and every year between 1989 and 1998, the National Center for Health Statistics drew a sample of office-based physicians from the master files of the American Medical Association and the American Osteopathic Association. Selected physicians were asked to record information on a subsample of office visits occurring during a randomly chosen week (different physicians were assigned...

Jennifer Alix and David Zilberman

This chapter demonstrates the complexity of the relationship among incentives, pesticide applications, and resistance buildup. First, analysis of the impacts of pesticide use must consider both the dynamics of the overall pest and the resistance buildup. Farmers may over-apply chemicals if they ignore resistance dynamics but may underapply chemicals if they ignore population dynamics. Furthermore, other factors (e.g., including alternative chemicals, integrated pest management, crop rotation)...

How Big Is the Problem

We live in a world in which problems tend to get prioritized in order of decreasing economic significance, or so economists would like to believe. Although the enormity of the resistance problem may be self-evident to those in the medical and agricultural communities who deal with it on a daily basis, assessing the economic impact is a necessary first step to bringing the problem to the attention of policymakers and stakeholders. There has been some work in this direction, although much remains...

Ecological versus Interventionist Strategies To Manage Resistance to Antibiotics

This chapter explores some economic and epidemiological implications of alternative disease treatment strategies in an institutional setting such as a hospital or clinic. We modify and generalize the integrated economic epi-demiological model first introduced by Laxminarayan and Brown (2001). Laxminarayan and Brown adapted an epidemiological multicompartment model of treatment and infection from Bonhoeffer and others (1997), a characterization based, in turn, on early twentieth-century...

Productivity Measurement

The methodology used for the economic assessment of pesticide productivity has made important advancements over the last decades. Initially, economists treated pesticides in a conventional production function framework, that is, assuming them to be yield-increasing factors like nitrogen fertilizer. Using a Cobb-Douglas (C-D) function framework, Headley (1968) estimated the marginal productivity of aggregated pesticide use in U.S. agriculture for the period 1955 to 1963. He found the marginal...

The Economic Model

The model we use here is in the same spirit as that presented in Laxminarayan and Brown (2001), but we have generalized it to account for fitness cost. In addition, we modified the objective function to minimize the discounted sum of treatment costs and damage costs resulting from illness. Additional details and definitions are in the chapter appendix. The dynamic treatment model can be stated as follows s.t. I(t) (p- rr + w(t) Ar - ft) ) -P(I(t))2, 1(0) Io (3) w(t) w(t) (1 - w(t))(Ar - rtf...

Chemical Companies Choices and Resistance

In examining the choices that lead to pesticide use, one can hardly ignore the influence of agrochemical producers and distributors on the process. Most analyses of resistance have been microeconomic in nature and, as such, have ignored industrywide considerations. However, the dynamics of pesticide use is determined by manufacturers. Manufacturers control product development, pricing, promotion, and most informational use guidance thus, their self-interest affects the evolution of resistance....

Gerd Fleischer and Hermann Waibel

Although resistance against pest control agents is perceived as a major threat for crop protection, there is considerable uncertainty about the economic justification of resistance management strategies. This chapter adopts a resource economic point of view. Pest susceptibility toward control measures is treated as biological capital. The objective is to identify the major factors to consider when evaluating resistance management strategies. The economic theory of nonrenewable resources...