Decision Making for Animal Health and Welfare: Integrating Risk-Benefit Analysis with Prospect Theory

Authors

  • Helena Hansson,

    Corresponding author
    1. Department of Economics, Swedish University of Agricultural Sciences, Uppsala, Sweden
    • Address correspondence to Helena Hansson, Department of Economics, Swedish University of Agricultural Sciences, P.O. Box 7013, SE-75007 Uppsala, Sweden; tel: +46-18-671714; Helena.Hansson@slu.se

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  • Carl Johan Lagerkvist

    1. Department of Economics, Swedish University of Agricultural Sciences, Uppsala, Sweden
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Abstract

This study integrated risk-benefit analysis with prospect theory with the overall objective of identifying the type of management behavior represented by farmers’ choices of mastitis control options (MCOs). Two exploratory factor analyses, based on 163 and 175 Swedish farmers, respectively, highlighted attitudes to MCOs related to: (1) grouping cows and applying milking order to prevent spread of existing infection and (2) working in a precautionary way to prevent mastitis occurring. This was interpreted as being based on (1) reactive management behavior on detection of udder-health problems in individual cows and (2) proactive management behavior to prevent mastitis developing. Farmers’ assessments of these MCOs were found to be based on asymmetrical evaluations of risks and benefits, suggesting that farmers’ management behavior depends on their individual reference point. In particular, attitudes to MCOs related to grouping cows and applying milking order to prevent the spread of mastitis once infected cows were detected were stronger in the risk domain than in the benefit domain, in accordance with loss aversion. In contrast, attitudes to MCOs related to working in a precautionary way to prevent cows from becoming infected in the first place were stronger in the benefit domain than in the risk domain, in accordance with reverse loss aversion. These findings are of practical importance for farmers and agribusiness and in public health protection work to reduce the current extensive use of antibiotics in dairy herds.

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