The Economy-Wide Effects of Foot and Mouth Disease in the UK Economy Adam Blake, M. Thea Sinclair, Guntur Sugiyarto 1 ABSTRACT A Computable General Equilibrium (CGE) model for the UK economy in 2001 is developed to assess the economy-wide effects of the Foot and Mouth Disease (FMD) in the UK, with particular attention to the tourism sector. The model includes detailed analysis of the agricultural and tourism sectors with specific links to UK foreign, domestic and regional tourism. This is the first such model that enables comprehensive assessment of the effects of policy changes and economic shocks such as FMD to be examined in the perspective of inter-sectoral and regional linkages of the UK economy. FMD has considerable effects not only on agricultural production and farming industries, but also on the tourism sector due to the inter-sectoral linkage and effects of the ways in which the government handled the outbreak. This stems from the imposition of ‘restricted areas’ that include historic sites and tourist attractions, closed countryside walking paths and waterways, and cancelled/postponed sports and public events. All are in addition to the mass slaughtering, burning and burying of animals which had considerable adverse effects on tourism. The combination of the direct and indirect effects of the outbreak and the related government policies should, therefore, be taken into account in assessing the economic impacts of FMD. The results from Nottingham Model show that FMD has much larger adverse effects on tourism than on agriculture. The policy implication is, therefore to consider the roles of other sectors in setting appropriate agriculture policy. Keywords: CGE, Tourism, Foot and Mouth Disease, Economic Effects JEL classification: C68, D58, E62, L83, and O53. 1 The authors are respectively Research Fellow, Professor and Research Assistant at the Christel DeHaan Tourism and Travel Research Institute, Nottingham University Business School, Jubilee Campus, Nottingham NG8 1BB, UK. http://www.nottingham.ac.uk/ttri The authors wish to thank members of the tourism industry for their support in providing data.