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

Timothy Richards, Peter Ellsworth, Russell Tronstad and Steve Naranjo

Journal of Agricultural and Resource Economics, 2010, vol. 35, issue 3, 19

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.

Keywords: Crop Production/Industries; Resource /Energy Economics and Policy (search for similar items in EconPapers)
Date: 2010
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Working Paper: Market-Based Instruments for the Optimal Control of Invasive Insect Species: B. Tabaci in Arizona (2010) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:jlaare:97852

DOI: 10.22004/ag.econ.97852

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