• You, an analyst at the Animal Health Agency (AHA), must make a

• 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