Rent-Seeking in Noxious Weed Regulations: Evidence from US States



equation (2) is, unlike (1), therefore is positive.

The commodity producers’ profit function is given by πm[pm, ps(L),Wm, L, A], where L

and A are as defined in the seed producers’ problem, pm is the aggregate price of final
commodities, and
Wm is a vector of non-seed input prices. Because seeds are inputs to
commodity production,
ps(L) enters πm as an extra input price. Moreover, commodity
producers’ profits are directly impacted by
L if it provides agronomic protection from invasive
weeds. Given
A and Wm, the profit impact on commodity producers of altering weed list L is:

(3)


dπm = m dPs + ∂Ξm
dL      ps L     L

As before ps / L is positive but ∂πm / ps is negative because seeds are inputs rather than
outputs in commodity production. Therefore, the first right-hand term in equation (3), which is
similar to the
market-price effect on consumers, is negative. The second right-hand term or the
agronomic-protection effect, remains positive since weed protection also applies to commodity
producers. The sign of equation (3) thus depends on the relative strength of these two effects.

The Social Planner’s Problem: Let ωc, ωs, and ωm refer respectively to weights the state

government places on consumer, seed producer, and commodity producer welfare. Such weights
are assumed to depend on stakeholder or interest-group lobbying. The state government’s or
social planner’s objective function can then be written as (Copeland and Taylor, 2004):

ωcV [ p ( L ), Y, L, I) + ωs s [ ps ( L ), Ws, L, A] 1

(4)    G ( L ) = max <

Ln


+ ωmπm[pm,ps(L),Wm,L,A]


An alternative representation of the social planner’s problem is:

(5)    G ( Ln ) = max { B( Ln ;1, a, ωc ωs, ωm, Z ) - C( Ln ;1, A,ωc ωs ,ωm, Z )} ,

Ln



More intriguing information

1. A Study of Adult 'Non-Singers' In Newfoundland
2. The name is absent
3. Growth and Technological Leadership in US Industries: A Spatial Econometric Analysis at the State Level, 1963-1997
4. Can a Robot Hear Music? Can a Robot Dance? Can a Robot Tell What it Knows or Intends to Do? Can it Feel Pride or Shame in Company?
5. The name is absent
6. The name is absent
7. Demographic Features, Beliefs And Socio-Psychological Impact Of Acne Vulgaris Among Its Sufferers In Two Towns In Nigeria
8. The East Asian banking sector—overweight?
9. Structure and objectives of Austria's foreign direct investment in the four adjacent Central and Eastern European countries Hungary, the Czech Republic, Slovenia and Slovakia
10. Evidence on the Determinants of Foreign Direct Investment: The Case of Three European Regions