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Use of decision trees in analysis of the potential gain from approved zone status under the ETJ shellfish health regime

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  • Britain has traditionally tried to protect its livestock, fish and shellfish production industries from many serious diseases by restricting imports of live animals- fish and shellfish to those from countries free of specified important diseases affecting particular classes of stock. Although the primary aim of the European Union has been to remove restrictions on trade between member states, the restriction of movements of stock to avoid the introduction of serious diseases into disease-free areas has also been enshrined in EU legislation. For aquaculture animals, the provisions enabling such controls were introduced in 1991 in directive 91/67 of the Council of the European Communities (OJ No. L 46/1). These allowed for the delineation of 'approved zones' free of one or more specified diseases within which introductions of susceptible species from outwith the approved zones can be banned. This paper considers the economics of establishing an approved zone in Great Britain for the diseases Marteilia refringens and Bonamia ostreae, to which the native flat oyster, Ostrea edulis, is susceptible. The granting of an approved zone requires submission of evidence to the Commission, from three years of intensive resting to establish the disease-free status of the area. In Great Britain, this process of testing of shellfish in relation to the diseases was completed in 1995 and the decision was to be made whether to proceed with an application for approved zone status for these diseases. The maintenance of an approved zone involves costs for the industry and national government in terms of additional monitoring of shellfish health status and the monitoring and application of controls on Imports. The bearing of these costs provides an uncertain gain in terms of a reduction in the risk of introduction of the disease(s) into the area, and consequent losses, both of current shellfish stocks and future production of shellfish. An appropriate methodology for analysing a decision of this sort, in which risk and uncertainty are central factors, is provided by statistical decision theory (Schlaifer 1959. Charnoff and Moses 1959. Raiffa and Schlaifer 1961) and specifically the use of decision trees. These have been found useful in a very wide range of applications from medicine (Keeler 1995) to accounting (Siedel 1991) to American football (Stoughton 1986). From the literature, it is clear that their main use has been in the business context (Coles and Rowley 1995, Boys 1990, Brookfield 1988). There is little in the literature to indicate their use in assisting national policy decision-making, yet risk and uncertainty is just as likely to be important in national decisions as business decisions. In this paper, the use of decision trees to analyse the potential gain to Britain from approved zone status for Marteilia and Bonamia is discussed. Particular problems addressed are those relating to the assessment of probabilities of disease outbreak, and issues relating to the time-frame of the analysis, given that the costs of enforcing an approved zone may be discontinued at any point (along with the approved zone), whereas the losses incurred in the event of an outbreak of the disease may continue for many years.
  • KEYWORDS: Non-tariff trade barriers, Oysters, Animal health, Aquaculture, Decision trees
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  • Sutherland, Roy, Brian Revell. 1996. [title]. Peer Review: No. In: Proceedings of the Eighth International Conference of the International Institute of Fisheries Economics and Trade, July 1-4, 1996, Marrakech, Morocco. Compiled by Ann L. Shriver. International Institute of Fisheries Economics & Trade, Corvallis, Oregon, USA, 2002. CD ROM.
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