used. What economics is fundamentally about then is quite simple: it is about assessing ways and means by which our choices, as individuals and nations, will lead to that allocation of resources amongst alternatives that will yield the most overall benefit. There are broader concerns than this of course, such as the equity of this resource allocation, but for the purposes of this paper, this simple definition provides the most important background to discussion.

Another important element of background to economics generally is the empirical manner in which economists approach the study of choice. Here there are three important categories of empirical activity, each of which will be considered in the paper with respect to the economic analysis of AMR.

First, economics may provide purely “descriptive” analysis, quantifying the phenomena which are of interest, such as national expenditure on health care, how much AMR costs a hospital, and so on. This is the most basic level of analysis, but nonetheless an important one in providing foundational information on which further analysis is based, as well as providing information on the consequence of choices that have already been made.

Second, economics may be used “predictively,” identifying the impact of a change. For example, if health care expenditure rises, what will happen to physician income? How will user-charges for pharmaceuticals affect their use? These analyses make use of descriptive data, together with conceptual models, to guide choices that are yet to be made.

Third, economics may be used “evaluatively,” suggesting whether one situation is “preferable,” more efficient, to another; for example, whether national health insurance is better than private health insurance, competition between health care suppliers is more efficient or prevention is better than cure. Here, prediction is taken further to provide an assessment of what should be done if efficiency is to be maximized.

Economic Conceptualization of AMR

The use of antimicrobials can result in the unwanted “side effect” of the development of resistance. Economists conceptualize this side effect as a negative “externality” resulting from the consumption of antimicrobials. A negative externality refers to a situation where a cost is imposed on others not directly involved in the decision to produce or consume the commodity causing the pollution. A classic example of a negative externality is pollution, such as acid rain.

Antimicrobial resistance is an externality associated with the consumption of antimicrobials (as part of the production of health), and is a negative

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