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There is no silver bullet: The value of diversification in planning invasive species surveillance

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  • Yemshanov, Denys
  • Koch, Frank H.
  • Lu, Bo
  • Lyons, D. Barry
  • Prestemon, Jeffrey P.
  • Scarr, Taylor
  • Koehler, Klaus

Abstract

In this study we demonstrate how the notion of diversification can be used in broad-scale resource allocation for surveillance of invasive species. We consider the problem of short-term surveillance for an invasive species in a geographical environment. We find the optimal allocation of surveillance resources among multiple geographical subdivisions via application of a classical portfolio framework, which allocates investments among multiple financial asset types with uncertain returns in a portfolio that maximizes the performance and, by meeting the desired diversification targets, protects against errors in estimating the portfolio's performance.

Suggested Citation

  • Yemshanov, Denys & Koch, Frank H. & Lu, Bo & Lyons, D. Barry & Prestemon, Jeffrey P. & Scarr, Taylor & Koehler, Klaus, 2014. "There is no silver bullet: The value of diversification in planning invasive species surveillance," Ecological Economics, Elsevier, vol. 104(C), pages 61-72.
  • Handle: RePEc:eee:ecolec:v:104:y:2014:i:c:p:61-72
    DOI: 10.1016/j.ecolecon.2014.04.024
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    References listed on IDEAS

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    1. Zhenyu Wang, 2005. "A Shrinkage Approach to Model Uncertainty and Asset Allocation," Review of Financial Studies, Society for Financial Studies, vol. 18(2), pages 673-705.
    2. Victor DeMiguel & Lorenzo Garlappi & Raman Uppal, 2009. "Optimal Versus Naive Diversification: How Inefficient is the 1-N Portfolio Strategy?," Review of Financial Studies, Society for Financial Studies, vol. 22(5), pages 1915-1953, May.
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    4. Kovacs, Kent F. & Haight, Robert G. & McCullough, Deborah G. & Mercader, Rodrigo J. & Siegert, Nathan W. & Liebhold, Andrew M., 2010. "Cost of potential emerald ash borer damage in U.S. communities, 2009-2019," Ecological Economics, Elsevier, vol. 69(3), pages 569-578, January.
    5. Christopher Costello & Carol McAusland, 2003. "Protectionism, Trade, and Measures of Damage from Exotic Species Introductions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 964-975.
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    7. 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.
    8. Ledoit, Olivier & Wolf, Michael, 2003. "Improved estimation of the covariance matrix of stock returns with an application to portfolio selection," Journal of Empirical Finance, Elsevier, vol. 10(5), pages 603-621, December.
    9. Best, Michael J & Grauer, Robert R, 1991. "On the Sensitivity of Mean-Variance-Efficient Portfolios to Changes in Asset Means: Some Analytical and Computational Results," Review of Financial Studies, Society for Financial Studies, vol. 4(2), pages 315-342.
    10. Horie, Tetsuya & Homans, Frances R., 2007. "Optimal Detection Strategies for an Established Invasive Forest Pest," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 9695, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Cook, David C. & Fraser, Rob W., 2008. "Trade and invasive species risk mitigation: Reconciling WTO compliance with maximising the gains from trade," Food Policy, Elsevier, vol. 33(2), pages 176-184, April.
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    Cited by:

    1. repec:eee:ecoser:v:27:y:2017:i:pa:p:25-37 is not listed on IDEAS
    2. Yemshanov, Denys & Haight, Robert G. & Koch, Frank H. & Lu, Bo & Venette, Robert & Fournier, Ronald E. & Turgeon, Jean J., 2017. "Robust Surveillance and Control of Invasive Species Using a Scenario Optimization Approach," Ecological Economics, Elsevier, vol. 133(C), pages 86-98.
    3. Akter, Sonia & Kompas, Tom & Ward, Michael B., 2015. "Application of portfolio theory to asset-based biosecurity decision analysis," Ecological Economics, Elsevier, vol. 117(C), pages 73-85.

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