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

Where Z = {Y,W_s,W_m}. Here, B represents a state’s benefits from IS regulation including the
eco-system preference effect on consumers, price-enhancement on seed producers and
agronomic-protection effects on seed and commodity producers. The cost, C, represents the
price-enhancement effects on consumers and commodity producers.⁵

The representation in (5) of the state’s policy problem helps underscore its strategic
nature. State i’s choice of L generally depends on state j’s choice because the extent of any
similarity in the two states’ lists, and thus in the legal constraints facing respective producers,
affects the competitive framework in both states. For instance, if the i-th state’s choice, Lⁱ , is
perfectly matched by the j-th state, L^j , it alters the benefits and costs of IS regulation to the i-th
state. In such a strategic environment, the i-th state’s problem can be recast as one of choosing
the degree of congruence or overlap between its IS regulation and that of the j-th state.
Reflecting as it does the observed cross-state quantitative similarities, congruence-based
accounting has the additional virtue of measuring compositional content of regulations. Let

• Lij be the percentage overlap between i-th and j-th state’s noxious weed list (number of
common species in the two lists divided by the number of species in the i-th state);

• Iij be the vector representing ecosystem dissimilarities between states i and j;

• Aij be the vector representing agronomic dissimilarities between states i and j;

⁵ Note that the first-order condition for maximizing equation (4),

which suggests that the solution to the maximization problem in (5) is the same as that in (4).

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