In this paper, the kinetics and economics of substrate degradation and biogas production are discussed. Mass balance on substrate, with either the Contois or Adams-Eckenfelder models, is used to design the mathematical models of volatile solids reduction and biogas fermentation. The predictions of both the models are found to be in close agreement with the observed values reported. A computer model based on a system dynamics approach is used to model the economics of biogas production by anaerobic digestion from cattle slurry available from typical rural families in Bangladesh. This model incorporates the Adams-Eckenfelder model to determine the amount of gas production and the technique described by Audsley and Wheeler to take into account the effects of price, interest, and inflation. The effects of changes of these parameters on the net profit or loss from the process are also considered. (author).