Market-Based Instruments for the Optimal Control of Invasive Insect Species: B. Tabaci in Arizona

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.


Issue Date:
2010-12
Publication Type:
Journal Article
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/97852
PURL Identifier:
http://purl.umn.edu/97852
Published in:
Journal of Agricultural and Resource Economics, 35, 3
Page range:
349-367
Total Pages:
19




 Record created 2017-04-01, last modified 2020-10-28

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