May 27, 2010

The Question
How can economics contribute to issues pertaining to antibiotic resistance?
What we found
Antibiotic resistance is a negative externality of antibiotic use. Economists can help devise plans taking into account resistance, internalizing the externality. Antibiotics can be viewed as a natural resource – their use lowers the antibiotic stock’s effectiveness – where economists already have experience. The social cost of overuse and the tradeoffs of use in livestock operations can be better quantified. Research into mechanism designs to provide incentives for optimal use and to invest and develop new antibiotics needs to be undertaken.
Why it matters
Society relies heavily on antibiotics. They are used both directly for human health and in the animal industry, improving feed efficiency and preventing disease. The widespread reliance has spurred an alarming rise in resistant strains of bacteria.