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You, an analyst at the Animal Health Agency (AHA), must make a recommendation whether or not to ban imported pigs due to a risk of importing a disease, porcine hoof blister (PHB), or to require that imported pigs be tested for the disease. With no ban, the probability of an outbreak is known with 90% confidence to be in the range [0.2%, 5%] and the cost of dealing with an outbreak is known to be $1,000,000 (which will ultimately be paid by the consumer). With a ban, there will be 0% probability of transmission, but the industry will experience increased costs that are estimated with 90% confidence to be in the range of [$1,000, $50,000]. (These costs will also be ultimately paid by the consumer.) You could also require a test that reduces the probability of an outbreak to [0.02%, 0.5%] (90% confidence), but increases costs by $10,000 (plus $1,000,000 in the event of an outbreak). Your agency s goal is to reduce the overall cost to the consumer Report

 

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