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 π_m[p_m, p_s(L),W_m, 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, p_s(L) enters π_m 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:

^dπm = ^dπm ^dPs + ∂Ξm
dL      ∂p_s ∂L     ∂L

As before ∂p_s / ∂L is positive but ∂π_m / ∂p_s 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 ω_c, ω_s, and ω_m 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):

∖ω_cV [ p ( L ), Y, L, I) + ωs ∏s [ p_s ( L ), Ws, L, A] 1

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

^{(5)    G (} Ln ) = m^ax { B⁽ Ln ;^{1, a, ω}c ^ωs^{, ω}m^, Z ) - C^{( L}n ;^1, A^,ωc ^ωs ^,ωm^, Z )} ^,

L_n

<<   <   5   6   7   8   9   10   11   >   >>