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Biosecurity Incentives, Network Effects, and Entry of a Rapidly Spreading Pest

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  • Hennessy, David A.

Abstract

Protection against pest invasion is a public good. Yet the nature of private incentives to avoid entry is poorly understood. This work shows that, due to increasing returns or network effects, private actions to avoid entry are strategic complements. This means that compulsory action, at least by a subset of parties, can be an effective policy. Both heterogeneity in biosecurity costs and the effect of private actions on the extent of the invasion threat are shown to have ambiguous effects on the magnitude of welfare loss due to strategic behavior. Communicated leadership by some party is preferred to simultaneous moves, and it may be best if the party with highest biosecurity costs assumes a leadership role.

Suggested Citation

  • Hennessy, David A., 2012. "Biosecurity Incentives, Network Effects, and Entry of a Rapidly Spreading Pest," Staff General Research Papers Archive 35016, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:35016
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    File URL: http://www2.econ.iastate.edu/papers/p15016-2012-03-29.pdf
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    2. Chitchumnong, Piyayut & Horan, Richard D., 2015. "Multiple Choices, Strategic Interactions, and Market Effects in Livestock Disease Risk Management," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205778, Agricultural and Applied Economics Association.
    3. Bate, Andrew M. & Jones, Glyn & Kleczkowski, Adam & MacLeod, Alan & Naylor, Rebecca & Timmis, Jon & Touza, Julia & White, Piran C.L., 2016. "Modelling the impact and control of an infectious disease in a plant nursery with infected plant material inputs," Ecological Modelling, Elsevier, vol. 334(C), pages 27-43.
    4. Anthony Rossiter & Susan M Hester, 2017. "Designing Biosecurity Inspection Regimes to Account for Stakeholder Incentives: An Inspection Game Approach," The Economic Record, The Economic Society of Australia, vol. 93(301), pages 277-301, June.
    5. Tom Kompas & Pham Van Ha & Hoa Thi Minh Nguyen & Iain East & Sharon Roche & Graeme Garner, 2017. "Optimal surveillance against foot-and-mouth disease: the case of bulk milk testing in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 61(4), pages 515-538, October.
    6. Kenneth R. Szulczyk, 2023. "Estimating the economic costs and mitigation of rice blast infecting the Malaysian paddy fields," SN Business & Economics, Springer, vol. 3(1), pages 1-21, January.
    7. Florec, Veronique & Sadler, Rohan J. & White, Ben & Dominiak, Bernie C., 2013. "Choosing the battles: The economics of area wide pest management for Queensland fruit fly," Food Policy, Elsevier, vol. 38(C), pages 203-213.
    8. Ariel Singerman & Pilar Useche, 2019. "The Role of Strategic Uncertainty in Area-wide Pest Management Decisions of Florida Citrus Growers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(4), pages 991-1011.
    9. Carson Reeling & Richard D. Horan, 2018. "Economic Incentives for Managing Filterable Biological Pollution Risks from Trade," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(3), pages 651-671, July.
    10. Olaniyi, Oladokun Nafiu & Szulczyk, Kenneth R., 2020. "Estimating the economic damage and treatment cost of basal stem rot striking the Malaysian oil palms," Forest Policy and Economics, Elsevier, vol. 116(C).
    11. Sara Garcia-Figuera & Elizabeth E. Grafton-Cardwell & Bruce A. Babcock & Mark N. Lubell & Neil McRoberts, 2021. "Institutional approaches for plant health provision as a collective action problem," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 13(2), pages 273-290, April.
    12. Osseni, Abdel Fawaz & Gohin, Alexandre & Rault, Arnaud, 2022. "Optimal Biosecurity Policy with Heterogeneous Farmers," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 47(2), May.
    13. Martin Gregor, 2011. "Tradeoffs of foreign assistance for the weakest-link global public goods," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(2), pages 233-251, April.
    14. Hennessy, David A. & Rault, Arnaud, 2023. "On systematically insufficient biosecurity actions and policies to manage infectious animal disease," Ecological Economics, Elsevier, vol. 206(C).
    15. Arora, Gaurav & Feng, Hongli & Hennessy, David A. & Loesch, Charles R. & Kvas, Susan, 2021. "The impact of production network economies on spatially-contiguous conservation– Theoretical model with evidence from the U.S. Prairie Pothole Region," Journal of Environmental Economics and Management, Elsevier, vol. 107(C).

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    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • H4 - Public Economics - - Publicly Provided Goods
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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