Market-Based Instruments for the Optimal Control of Invasive Insect Species: B. Tabaci in Arizona
AbstractInvasive 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.
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Bibliographic InfoArticle provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.
Volume (Year): 35 (2010)
Issue (Month): 3 (December)
externalities; invasive species; optimal control; permits; spatial-temporal model; taxes; Crop Production/Industries; Resource /Energy Economics and Policy;
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- repec:ags:jrapmc:122310 is not listed on IDEAS
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