A second look at managing import risk from invasive species
This 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.
References listed on IDEAS
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- Margolis, Michael & Shogren, Jason F. & Fischer, Carolyn, 2005.
"How trade politics affect invasive species control,"
Elsevier, vol. 52(3), pages 305-313, February.
- Margolis, Michael & Shogren, Jason, 2004. "How Trade Politics Affect Invasive Species Control," Discussion Papers dp-04-07, Resources For the Future.
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