An Independent Review of New Zealand's Biosecurity Surveillance Systems-Economic Model

Background & Disclaimer

Economic Model

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The Terms of Reference for this Review specifically required the development of an economic decision support framework that for used in establishing biosecurity Surveillance priorities.

Mumford* has provided a useful analysis of many of the issues involved in the context of evaluating cost-benefit for pest and disease response. Some of his observations apply equally well to the determination of Surveillance priorities and options. (* reference: Mumford, J. Cost benefit analysis procedures to be applied to unwanted organisms or pest responses. Draft discussion paper. 1999, MAF: Wellington)

In reviewing the common criticisms applied to economic analyses applied to pest management assessments Mumford identified the following critical issues which commonly arise:

  • The need to balance technical, political and economic considerations in order to meet stakeholders' wishes;
  • A high level of uncertainty in the data available and difficulties in making reliable estimates of probabilities when setting priorities;
  • Incomplete specification or inadequate technical plans being compared;
  • Inadequate spatial resolution which does not reflect the variability or localisation of both risks and impacts;
  • Use of inappropriate discount rates, time scales and lack of consideration of non-market values;
  • Inadequate consideration of dynamic variables and matters related to changing human behaviour based on changes of circumstance.

These factors taken together suggest the need for a carefully considered approach that needs to be well communicated and understood as well as applied consistently in order to avoid the obvious pitfalls.

Whilst some might say that the issues involved with biosecurity and Surveillance in particular are inherently so complex, uncertain and, in many cases, subjective, that economic analysis is of little value in assisting decision-makers in this domain, it is our view that this is not so.

Economic analysis is not a substitute for sound judgement, but it does provide decision-makers with useful information to assist in evaluating options, particularly when it is carried out as part of an iterative approach where the impact of varying assumptions can be explored in terms of their overall affect on the outcome.

Page last updated: 16 October 2008