Predicting the Total Economic Impacts of Invasive Species: The case of the Red Streaked Leafhopper

Lirong Liu () and Brian Piper ()
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Lirong Liu: Department of Economics, Sam Houston State University
Brian Piper: Department of Economics and International Business, Sam Houston State University

No 1412, Working Papers from Sam Houston State University, Department of Economics and International Business

Abstract: This paper lays out a framework for predicting the agricultural losses caused by an impeding invasion of a non-native species and for estimating the total economic impacts associated with the invasion, including direct, indirect and induced economic impacts. Along with the establishment of predicted total economic impacts, effects on employment and tax revenues are estimated using an input-output model. These estimates are essential for policy-makers to formulate appropriate responses. The framework is then applied to the case of the Red Streaked Leafhopper in the sugarcane producing regions of Louisiana. Results show that total annual impacts can be as high as $75 million from the leafhopper or as high as $956 million from the leafhopper carrying a specific phytoplasm after 25 years. State and local governments would lose $683,000 annually while federal revenues would be reduced by $3.3 million after 25 years. Employment effects from the leafhopper’s spread range from 821 lost jobs with just the leafhopper to 10,397 lost jobs with the leafhopper and phytoplasm at 25 years, an almost 0.1% point increase in Louisiana’s unemployment at current employment levels.

Date: 2014-12
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