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Application of Comparative Dynamics in Stochastic Invasive Species Management in Agricultural Production

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  • Lu, Liang
  • Elbakidze, Levan

Abstract

In this study, we formulate a stochastic dynamic framework for pest control over the growing season taking into account forecasts of weather conditions and pest infestation expectations. Using stochastic envelope theorem and stochastic comparative dynamics, we analytically show how the stochastic correlation between the prediction errors should affect optimal pesticide usage path. As a case study, we apply the analytical results of the paper for pesticide use in the Palouse region of Washington where pea aphid is the primary threat for lentil production. By stochastic dynamic programming, our simulation shows the optimal dimethoate usage path, which illustrates our findings in the analytical part.

Suggested Citation

  • Lu, Liang & Elbakidze, Levan, 2012. "Application of Comparative Dynamics in Stochastic Invasive Species Management in Agricultural Production," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 125226, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea12:125226
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    References listed on IDEAS

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    1. Zivin, Joshua & Hueth, Brent M. & Zilberman, David, 2000. "Managing a Multiple-Use Resource: The Case of Feral Pig Management in California Rangeland," Journal of Environmental Economics and Management, Elsevier, vol. 39(2), pages 189-204, March.
    2. Cobourn, Kelly M. & Burrack, Hannah J. & Goodhue, Rachael E. & Williams, Jeffrey C. & Zalom, Frank G., 2011. "Implications of simultaneity in a physical damage function," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 278-289, September.
    3. Glenn Fox & Alfons Weersink, 1995. "Damage Control and Increasing Returns," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 33-39.
    4. Chang,Fwu-Ranq, 2009. "Stochastic Optimization in Continuous Time," Cambridge Books, Cambridge University Press, number 9780521541947.
    5. T.J. Richards & J. Eaves & M. Manfredo & S.E. Naranjo & C.-C. Chu & T.J. Henneberry, 2008. "Spatial-Temporal Model of Insect Growth, Diffusion and Derivative Pricing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(4), pages 962-978.
    6. Thomas L. Marsh & Ray G. Huffaker & Garrell E. Long, 2000. "Optimal Control of Vector-Virus-Plant Interactions: The Case of Potato Leafroll Virus Net Necrosis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 556-569.
    7. Richard M. Adams & Stephen Polasky, 1998. "The Value of El Niño Forecasts in the Management of Salmon: A Stochastic Dynamic Assessment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 765-777.
    8. David Sunding & Joshua Zivin, 2000. "Insect Population Dynamics, Pesticide Use, and Farmworker Health," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 527-540.
    9. Jean-Daniel M. Saphores, 2000. "The Economic Threshold with a Stochastic Pest Population: A Real Options Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(3), pages 541-555.
    10. Lars J. Olson & Santanu Roy, 2002. "The Economics of Controlling a Stochastic Biological Invasion," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(5), pages 1311-1316.
    11. LaFrance, Jeffrey T. & Barney, L. Dwayne, 1991. "The envelope theorem in dynamic optimization," Journal of Economic Dynamics and Control, Elsevier, vol. 15(2), pages 355-385, April.
    12. Alain Carpentier & Robert D. Weaver, 1997. "Damage Control Productivity: Why Econometrics Matters," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 47-61.
    13. Saphores, Jean-Daniel M. & Shogren, Jason F., 2005. "Managing exotic pests under uncertainty: optimal control actions and bioeconomic investigations," Ecological Economics, Elsevier, vol. 52(3), pages 327-339, February.
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    More about this item

    Keywords

    Stochastic Optimal Control; Climate Change; Pest Management; Crop Production/Industries; Farm Management; Q10; Q54;

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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