Economic analysis of control strategies for contagious diseases is a necessity in the development of contingency plans. Economic impacts arising from epidemics such as highly pathogenic avian influenza (HPAI) consist of direct costs (DC), direct consequential costs (DCC), indirect consequential costs (ICC) and aftermath costs (AC). Epidemiological models to support economic analysis need to provide adequate outputs for these critical economic parameters. Of particular importance for DCC, ICC and AC is the spatial production structure of a region. Spatial simulation models are therefore particularly suited for economic analysis; however, they often require a large number of parameters. The aims of this study are (i) to provide an economic rationale of epidemiological modelling in general, (ii) to provide a transparent description of the parameterization of a spatially based epidemiological model for the analysis of HPAI control in the Netherlands and (iii) to discuss the validity and usefulness of this model for subsequent economic analysis. In the model, HPAI virus transmission occurs via local spread and animal movements. Control mechanisms include surveillance and tracing, movement restrictions and depopulation. Sensitivity analysis of key parameters indicated that the epidemiological outputs with the largest influence on the economic impacts (i.e. epidemic duration and number of farms in the movement restriction zone) were more robust than less influential indicators (i.e. number of infected farms). Economically relevant outputs for strategy comparison were most sensitive to the relative role of the different transmission parameters. The default simulation and results of the sensitivity analysis were consistent with the general outcomes of known HPAI models. Comparison was, however, limited due to the absence of some economically relevant outputs. It was concluded that the model creates economically relevant, adequate and credible output for subsequent use in economic analysis. A detailed economic analysis is presented in a subsequent article.