Using a structural gravity model to assess the risk of livestock disease incursions in the UK

Abstract

A structural gravity model of UK livestock trade is developed and employed to assess the risk of possible disease incursions into the UK. Gravity models have been employed for a number of years in the econometric literature on international trade with considerable success. They involve modeling international trade by incorporating spatially explicit information into a model of the flow of traded goods between nations. Structural gravity models differ slightly from the naive gravity model by developing a structural econometric model from an explicit theoretical model of consumer decision-­‐making and this then results in the incorporation of multilateral trade resistance terms into the gravity equation. Such models have made considerable methodological advances in recent years. Gravity models have also been developed by epidemiologists to model the spatial spread of diseases between different populations. In this paper I develop a model that combines these two different approaches by using a combined panel dataset of livestock trade and disease incidence for the UK. Epidemiological variables are built into a theoretical model of individual consumer and producer decision-­‐making and the corresponding structural gravity equation is derived. This is then estimated econometrically.