A second look at managing import risk from invasive species
AbstractThis paper investigates optimal trade-related policies for managing import risk arising from invasive species. We find analytical evidence that when a cleaning technology is available for foreign exporters and the optimal level of import inspections is strictly positive, a penalty imposed on contaminated imports is likely to be superior to a simple tariff policy designed to reduce the overall volume of trade, for low levels of the inspection cost. The first-best policy involves a two-part tariff composed of a penalty levied on contaminated units to internalize the invasive species externality, plus a fee collected on all imported units to cover inspection costs.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Environmental Economics and Management.
Volume (Year): 56 (2008)
Issue (Month): 3 (November)
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Web page: http://www.elsevier.com/locate/inca/622870
First-best policy Import risk Invasive species Tariffs Trade policy;
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