An empirical bioeconomic investigation of efficiency in the insecticide regulatory process

Abstract

This paper presents an interdisciplinary approach to estimating the relative efficiency of static, myopic, and dynamic insecticide regulatory decision making when there are potential impacts associated with pest resistance. A theoretical control model was developed using expected total economic surplus as the objective function, with an empirical solution to the maximization problem attained by imposing a heuristic search procedure on a bioeconomic simulation model. Although the impact of non‐dynamic decision making was the most severe, in percentage terms, for short‐run planning horizons, the magnitude of the long‐run losses associated with non‐dynamic decision making could serve as a rationale for modifying the regulatory process to include dynamic considerations. The static analyses usually used in the benefits assessment procedure may severely underestimate the actual benefits of continued chemical registration, and the efficiency gains to society have the potential to offset the increased costs of regulation that would occur under a revised process.