UPDATED ESTIMATED ECONOMIC WELFARE IMPACTS
OF PORCINE EPIDEMIC DIARRHEA VIRUS (PEDV)
by Philip L. Paarlberg
Department of Agricultural Economics
Purdue University
...
Working Paper #14-4
June 2014
Abstract
Estimates of pig loss from Porcine Epidemic Diarrhea Virus (PEDv) determine changes in economic welfare. Hog and pork prices rise, so aggregate returns to hog growers increase. For a 3% annual pig loss, growers gain $1.2 billion annually, while for a 6% annual pig loss, the gain is $2.3 billion. Losses to infected growers are smaller than gains to uninfected growers. Annual returns to hog slaughter fall by $481 to $929 million. Retail value-added falls by $1.1 to $2.2 billion. Annual consumer surplus also declines from $300 to $600 million. The estimated net annual decrease for U.S. economic welfare from PEDv summed across all effects ranges from $900 million to $1.8 billion.
