The name is absent

The Economics of Controlling a Biological Invasion
by

Lars J. Olson^t

Dept. of Agricultural and Resource Economics
University of Maryland, College Park, MD 20742, USA

and

Santanu Roy
Department of Economics
Florida International University, Miami, FL 33199, USA

Abstract

The paper develops a simple economic model of a biological invasion. The natural growth of the
invasion is non-convex and the immediate cost of controlling the invasion depends on the level of current
control as well as the current size of the invasion. Greater control raises control costs today while
reducing damages - now and in the future. In addition, by decreasing the size of the invasion, increased
control today raises the marginal cost of control in the future. As a consequence, the optimal path of an
invasion is not necessarily monotonic. When the marginal control cost declines sharply with the size of
invasion, it may be optimal to allow an invasion to grow naturally before it is controlled. We
characterize conditions under which it is optimal to eradicate an invasive species (immediately and
eventually) and conditions under which it is optimal to manage an invasion without complete eradication.

Keywords: Biological invasion, invasive species, eradication, renewable resource economics

JEL Classifications: Q20, D99

WP 03-06, Department of Agricultural and Resource Economics, University of Maryland, College Park,
May 2003

Copyright © 2003 by Lars J. Olson and Santanu Roy

All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes
by any means, provided that this copyright notice appears on all such copies.

^tResearch supported by MAES grant #01-1-10791

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