Market-Based Instruments for the Optimal Control of Invasive Insect Species: B. Tabaci in Arizona
Timothy J. Richards,
Russell Tronstad and
No 61189, 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado from Agricultural and Applied Economics Association
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, so we expect a quantity-based system to be preferred. Monte Carlo simulations of optimal steady-state outcomes confirm our expectations.
Keywords: Environmental Economics and Policy; Public Economics; Risk and Uncertainty (search for similar items in EconPapers)
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Journal Article: Market-Based Instruments for the Optimal Control of Invasive Insect Species: B. Tabaci in Arizona (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea10:61189
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