Market-based instruments for the optimal control of invasive insect species: B. Tabaci in Arizona

Timothy Richards, Peter Ellsworth, Russell Tronstad, Steve Naranjo

Research output: Contribution to journalArticlepeer-review

12 Scopus citations

Abstract

Invasive insect species represent perhaps one of the most significant potential sources of economic risk to U.S. agricultural production. Private control of invasive insect species is likely to be insufficient due to negative externality and weaker-link public good problems. In this study, we compare a system of Pigouvian taxes with tradable permits for invasive species control. While the emissions control literature shows that taxes are preferred to permits under cost uncertainty, invasive-species control involves correlated cost and benefit uncertainty. Hence, we expect a quantity-based system to be preferred. Monte Carlo simulations of optimal steady-state outcomes confirm our expectations.

Original languageEnglish (US)
Pages (from-to)349-367
Number of pages19
JournalJournal of Agricultural and Resource Economics
Volume35
Issue number3
StatePublished - Dec 1 2010

Keywords

  • Externalities
  • Invasive species
  • Optimal control
  • Permits
  • Spatial-temporal model
  • Taxes

ASJC Scopus subject areas

  • Animal Science and Zoology
  • Agronomy and Crop Science
  • Economics and Econometrics

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