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Optimal Regulation of Invasive Species Long-Range Spread: A General Equilibrium Approach

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  • McDermott Shana

    (Department of Economics, University of New Mexico, Albuquerque, NM 87131, USA)

Abstract

Economic activity is implicated in the long-range spread of invasive species, resulting in ecological and economic damages. Current policies that are used to prevent such spread include specific and ad valorem taxes. However, these taxes are often created under ecological and economic uncertainty. To address this concern, this paper develops a general equilibrium model capable of evaluating the efficiency of specific and ad valorem taxes under uncertainty. Results show that specific taxes are more efficient at achieving a social optimum under imperfect information and that a combination of taxes is needed for multiple forms of long-range transmission.

Suggested Citation

  • McDermott Shana, 2015. "Optimal Regulation of Invasive Species Long-Range Spread: A General Equilibrium Approach," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(4), pages 1731-1752, October.
    • Handle: RePEc:bpj:bejeap:v:15:y:2015:i:4:p:1731-1752:n:7
    DOI: 10.1515/bejeap-2014-0087
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    References listed on IDEAS

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    1. Michael Keen, 1998. "The balance between specific and ad valorem taxation," Fiscal Studies, Institute for Fiscal Studies, vol. 19(1), pages 1-37, February.
    2. Koskela, Erkki & Ollikainen, Markku, 2001. "Forest Taxation and Rotation Age under Private Amenity Valuation: New Results," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 374-384, November.
    3. Lawrence H. Goulder & Ian W.H. Parry & Roberton C. Williams III & Dallas Burtraw, 2002. "The Cost-Effectiveness of Alternative Instruments for Environmental Protection in a Second-Best Setting," Chapters, in: Lawrence H. Goulder (ed.), Environmental Policy Making in Economies with Prior Tax Distortions, chapter 27, pages 523-554, Edward Elgar Publishing.
    4. Grant, Simon & Quiggin, John, 1997. "Strategic Trade Policy under Uncertainty: Sufficient Conditions for the Optimality of Ad Valorem, Specific and Quadratic Trade Taxes," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(1), pages 187-203, February.
    5. Mehta, Shefali V. & Haight, Robert G. & Homans, Frances R. & Polasky, Stephen & Venette, Robert C., 2007. "Optimal detection and control strategies for invasive species management," Ecological Economics, Elsevier, vol. 61(2-3), pages 237-245, March.
    6. Kossioris, G. & Plexousakis, M. & Xepapadeas, A. & de Zeeuw, A., 2011. "On the optimal taxation of common-pool resources," Journal of Economic Dynamics and Control, Elsevier, vol. 35(11), pages 1868-1879.
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