Publication
Jia, Y., Hennessy D.A. and Feng, H. 2024. Economics of Informed Antibiotic Management and Judicious Use Policies in Animal Agriculture. Environmental and Resource Economics, forthcoming.
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 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) whenever 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 while 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.
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Hennessy, D.A. and Jia, Y.. 2024. Pest Susceptibility Commons in Agriculture. Agricultural Policy Review, Winter 2024. Center for Agricultural and Rural Development, Iowa State University. Available at: https://agpolicyreview.card.iastate.edu/winter-2024/pest-susceptibility-commons-agriculture.
Feng, H., D.A. Hennessy, Y. Jia, M. G.S. McKendree, and C. Wolf. 2018. Dairy Sector Consolidation, Scale, Automation and Factor Biased Technical Change: Working through ‘Get Big or Get Out’. Choices, 33(4th Quarter 2018), 8 pages.
Working paper
Will Tests Lead to More Informed Antibiotics Use? An Application in Veterinarian Diagnostic Decisions.
Abstract Effective in 2017, the U.S. Veterinary Feed Directive (VFD) requires that a veterinarian must decide whether medically important antibiotic treatment is appropriate. VFD places antibiotic stewardship largely into the hands of veterinarians, relying on their understanding of the animal disease, resistance biology and implications for animal welfare. This paper investigates the assumption underpinning VFD regulation. Specifically, we focus on how effectively veterinarians manage information when making antibiotic recommendations. We model a diagnosis as a belief updating process where veterinarians form their initial probabilistic beliefs (priors) about animal health conditions based on initial inspections and revise their beliefs in response to test results (new information). Bayes’ rule prescribes efficient information management, while deviations from Bayesian updating are well documented in literature. We set up experiments in veterinary clinical settings in a survey and asked 241 veterinarians to make probabilistic assessments of animals having diseases. Consistent with findings in lab economic experiments, veterinarians are biased in managing information in diagnosis. They underuse both priors and test information. In addition, veterinarians respond asymmetrically to test results that confirm their priors and test results that contradict their priors. Antibiotic prescriptions based on biased diagnoses may be inefficient and contribute to antibiotic resistance development. These findings point to opportunities for antibiotic stewardship promotion through information and education programs directed at healthcare professionals. Furthermore, the training program should be heterogenous for veterinarians in different practice areas. Large animal veterinarians who underuse priors more severely should practice placing more weights on priors, while small animal veterinarians who underuse information from test results should receive intensive training in that regard. Given the evidence that experienced veterinarians deviate further from efficient information management than their less experienced colleagues, regular training may be necessary and beneficial for promoting diagnosis accuracy and antibiotic stewardship.
Bt Corn, Insecticide Use, and Resistance Time Trend in the United States. Yanan Jia, Hongli Feng, and David A. Hennessy.
Abstract This project investigates the impact of biological control decisions in corn production on chemical insecticide use in the United States. Genetically engineered crops that produce Bt (Bacillus thuringiensis) toxins can control some key pests and have been adopted widely. Specifically, Cry3Bb1 toxin was first commercialized in 2003 as an effective control for a key pest in maize in the United States. Using a unique dataset, we investigate how Cry3Bb1 toxin adoption can affect chemical insecticide use by adopters and non-adopters over years. The identification strategy is generalized difference-in-difference. The empirical results show that adopters substitute away from chemical insecticides which are targeted at corn rootworm. However, applied chemicals intended for rootworm on Cry3Bb1 corn gradually increases in the years after adoption. The upward trend in insecticide use is consistent with insect resistance development. For non-adopters, the amount of corn rootworm targeting insecticide use decreases as well, suggesting that non-adopters also benefited. This finding is consistent with the well-known conclusion in literature that Bt adoption brings a suppression effect on local pest population. Furthermore, insecticide use by non-adopters decreases over years and finally arrives at a plateau, suggesting that non-adopters learned slowly that there was less need for applied insecticides. The findings should be of interest to those concerned with the ecosystem services provided by insects, integrated pest management (IPM) regulators and practitioners, as well as others interested in the stewardship of biological resources.
Do Large Dairy Farms Use More Antibiotics? Yanan Jia, Hongli Feng, and David A. Hennessy.
Abstract Global milk production has undergone drastic change in recent years. Smaller farms have been under severe stress, squeezed between low milk prices and high feed prices. The resulting shakeout has led to high exit rates among smaller farms. However, overall production has expanded modestly as a few larger farms have taken advantage of scale economies to expand sharply. Animal agriculture sector structure is both very important and poorly understood as a factor in determining how the sector links with society at large, including consequences for One Health outcomes. In this project, we conducted a survey to ask about antibiotic usage patterns in three U.S. Great Lakes Region states (Wisconsin, Minnesota, Michigan) and explore how ongoing structural changes in the dairy sector affect the aggregate antibiotic use. Among farms which use antibiotics, the growing larger farms seem to be more efficient at antibiotic management. However, larger farms are less likely to be operated without antibiotics. Also, farms which have expanded in recent years or intend to expand in the near future, are more likely to use antibiotics for therapeutic purposes (i.e., non-organic farms). Therefore, to determine the aggregate effect of current structural changes in the dairy sector, future research is warranted.