North American horticultural industry and the risk of plant invasion

We develop a monopolistic competition model of the horticultural industry and estimate the resulting profit function with U.S. and Canadian industry data. Combining the results with a hazard analysis of the characteristics of exotic plants introduced in North America, we explore optimal tax simulati...

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Bibliographic Details
Published in:Agricultural economics 2011-11, Vol.42 (s1), p.113-130
Main Authors: Barbier, Edward B, Gwatipedza, Johnson, Knowler, Duncan, Reichard, Sarah H
Format: Article
Language:English
Subjects:
Biological invasion
commercial horticulture
D43
ecological invasion
Exotic plant species
funding
hazard characterization
Horticultural industry
introduced plants
invasive species
Monopolistic competition
monopoly
Nurseries
plant characteristics
plant industry
plant nurseries
profits and margins
Q29
risk
sales
taxes
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Summary:We develop a monopolistic competition model of the horticultural industry and estimate the resulting profit function with U.S. and Canadian industry data. Combining the results with a hazard analysis of the characteristics of exotic plants introduced in North America, we explore optimal tax simulations for internalizing the risk and costs of a potential plant invasion. If the share of the exotic plant sales in final profits is large, then the resulting annual fee will be high, discouraging the expansion of the nursery industry. However, the annual revenues could fund efforts to mitigate the damages resulting from any accidental plant invasion.
ISSN:0169-5150
1574-0862
DOI:10.1111/j.1574-0862.2011.00556.x