Exotic Pests and Trade: When Is Pest-Free Status Certification Worthwhile?
Erik Lichtenberg () and
Lori Lynch ()
Agricultural and Resource Economics Review, 2006, vol. 35, issue 1, 52-62
Pest-free status certification is desirable if the demand-side impacts (increased export revenue) and supply-side impacts (lower pest damage and decreased ongoing control costs) exceed the compliance monitoring and eradication costs. Thus, eradication may be optimal without certification. Certification is more likely for regions facing costly treatment requirements (bans) or possessing geographic traits that lower monitoring costs and infestation probabilities than for those exporting higher-valued products. Certification benefits producers but hurts consumers. Thus, political feasibility may be greater if domestic consumption is a small share of the market and if the additional tax burden of certification programs is light.
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