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An Options Based Bioeconomic Model for Biological and Chemical Control of Invasive Species

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  • Alex L. Marten
  • Christopher C. Moore

Abstract

The management of non-native invasive species is a complex but crucial task given the potential for economic and environmental damages. For many invasions the development of socially optimal control strategies requires more than is offered by the single-species, single-control models that have dominated this area of research. We develop a general stochastic optimal control framework that accommodates multiple interacting species while accounting for uncertainty in the temporal population dynamics. This extension to the current line of bioeconomic control models allows for the design of optimal management strategies that utilize both chemical and biological controls in an environment of uncertainty and irreversibility. We demonstrate the benefits of combining chemical and biological controls in long term management strategies through a case study of the hemlock woolly adelgid infestation in the eastern United States. In this application we find that the introduction of natural predators is usually sufficient to manage the infestation, though the availability of chemical controls is important when the detection of an invasion or the subsequent response is delayed.

Suggested Citation

  • Alex L. Marten & Christopher C. Moore, 2010. "An Options Based Bioeconomic Model for Biological and Chemical Control of Invasive Species," NCEE Working Paper Series 201006, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised May 2010.
  • Handle: RePEc:nev:wpaper:wp201006
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    File URL: https://www.epa.gov/environmental-economics/working-paper-options-based-bioeconomic-model-biological-and-chemical
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    References listed on IDEAS

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    1. Olson, Lars J. & Roy, Santanu, 2003. "The Economics Of Controlling A Biological Invasion," Working Papers 28591, University of Maryland, Department of Agricultural and Resource Economics.
    2. Harper, Carolyn R., 1991. "Predator-Prey Systems In Pest Management," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 20(1), April.
    3. Koji Kotani & Makoto Kakinaka & Hiroyuki Matsuda, 2006. "Dynamic Economic Analysis on Invasive Species Management: Some Policy Implications of Catchability," Working Papers EMS_2006_16, Research Institute, International University of Japan.
    4. Olson, Lars J., 2006. "The Economics of Terrestrial Invasive Species: A Review of the Literature," Agricultural and Resource Economics Review, Cambridge University Press, vol. 35(01), pages 178-194, April.
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    7. 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.
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    11. Lars Olson & Santanu Roy, 2008. "Controlling a biological invasion: a non-classical dynamic economic model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 36(3), pages 453-469, September.
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    14. Higgins, Steven I. & Azorin, Esteban J. & Cowling, Richard M. & Morris, Mike J., 1997. "A dynamic ecological-economic model as a tool for conflict resolution in an invasive-alien-plant, biological control and native-plant scenario," Ecological Economics, Elsevier, vol. 22(2), pages 141-154, August.
    15. Christopher Moore & Daniel Phaneuf & Walter Thurman, 2011. "A Bayesian Bioeconometric Model of Invasive Species Control: The Case of the Hemlock Woolly Adelgid," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(1), pages 1-26, September.
    16. Lovell, Sabrina J. & Stone, Susan F. & Fernandez, Linda, 2006. "The Economic Impacts of Aquatic Invasive Species: A Review of the Literature," Agricultural and Resource Economics Review, Cambridge University Press, vol. 35(01), pages 195-208, April.
    17. 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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    Citations

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    Cited by:

    1. arnaud dragicevic, 2012. "Bayesian Population Dynamics of Spreading Species," THEMA Working Papers 2012-30, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    2. Fenichel, Eli P. & Horan, Richard D., 2016. "Tinbergen and tipping points: Could some thresholds be policy-induced?," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PB), pages 137-152.
    3. Dalmazzone, Silvana & Giaccaria, Sergio, 2014. "Economic drivers of biological invasions: A worldwide, bio-geographic analysis," Ecological Economics, Elsevier, vol. 105(C), pages 154-165.
    4. Eli Fenichel & Timothy Richards & David Shanafelt, 2014. "The Control of Invasive Species on Private Property with Neighbor-to-Neighbor Spillovers," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(2), pages 231-255, October.
    5. Davis, Rebecca J. & Sims, Charles, 2016. "To Frack or Not to Frack: Option Value Analysis on the U.S. Natural Gas Market," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235642, Agricultural and Applied Economics Association.
    6. Sturla Kvamsdal & Diwakar Poudel & Leif Sandal, 2016. "Harvesting in a Fishery with Stochastic Growth and a Mean-Reverting Price," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(3), pages 643-663, March.
    7. Charles Sims & David Finnoff & Jason F. Shogren, 2016. "Bioeconomics of invasive species: using real options theory to integrate ecology, economics, and risk management," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(1), pages 61-70, February.
    8. Sims, Charles & Finnoff, David & O’Regan, Suzanne M., 2016. "Public control of rational and unpredictable epidemics," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PB), pages 161-176.
    9. Sims, Charles & Finnoff, David, 2013. "When is a “wait and see” approach to invasive species justified?," Resource and Energy Economics, Elsevier, vol. 35(3), pages 235-255.

    More about this item

    Keywords

    invasive species; real options; integrated pest managment; biological control;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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