This article describes the fundamental principles of economic assessment of animal health performance in the modem animal production environment. Animal production is a complex system of combined inputs (eg, physical inputs, managerial decision choices) into a production process that produces products valued by society. Perturbations to this system include disease processes and management inefficiencies. Economic valuation of these perturbations must account for the marginal changes in revenues and cost, the time dimensions of occurrence, the inherent risk characteristics of biologic systems, and any opportunity value that exists that allows management to intervene within the process and make economically influencing decisions. It has been recognized that improving animal health can play a major role in achieving efficient and economically rewarding production.
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