Environmental and Resource Economics

, Volume 50, Issue 4, pp 605–627

Stepping Stones for Biological Invasion: A Bioeconomic Model of Transferable Risk

Authors

    • Alfred Weber InstituteUniversity of Heidelberg
  • David Finnoff
    • Department of Economics and FinanceUniversity of Wyoming
  • Jonathan Bossenbroek
    • University of Toledo
  • Jason F. Shogren
    • Department of Economics and FinanceUniversity of Wyoming
  • David Lodge
    • Center for Aquatic ConservationUniversity of Notre Dame
Article

DOI: 10.1007/s10640-011-9485-7

Cite this article as:
Warziniack, T., Finnoff, D., Bossenbroek, J. et al. Environ Resource Econ (2011) 50: 605. doi:10.1007/s10640-011-9485-7

Abstract

We investigate three sources of bias in valuation methods for ecosystem risk: failure to consider substitution possibilities between goods, failure to consider nonseparability of ecosystem services with market goods, and failure to consider substitution possibilities between ecosystems. The first two biases are known in the literature, and we offer insight on the size of the bias for a specific example. Our work on spatially transferable risk is novel. We develop the concept and show how it may undermine typical invasion prevention strategies. We find three key results. First, partial equilibrium estimates of welfare loss are significantly overestimated relative to general equilibrium estimates. If ecosystem services and market goods are substitutes the partial equilibrium bias is greater than if they are compliments. Second, well-intended policies do not necessarily reduce overall risk; risk reduction actions can transfer risk to another time or location, or both, which may increase total risk. Third, policies of quotas and inspections have to be extreme to improve welfare, with inspections having advantages over quotas.

Keywords

BioeconomicInvasive speciesRiskTransferable riskWelfare
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Copyright information

© Springer Science+Business Media B.V. 2011