Abstract
This paper develops a two-stage model for the optimal management of a potential invasive species. The arrival of an invasive species is modeled as an irreversible event with an uncertain arrival time. The model is solved in two stages, beginning with the post-invasion stage. Once the arrival occurs, the optimal path of species removal is that which minimizes the present value of damage and removal costs plus the expected present value of prevention costs. An expenditure-dependent, conditional hazard rate describing species arrival is developed based on discussions with natural resource managers. We solve for the optimal sequence of prevention expenditures, given the minimum invasion penalty as just described. For the case of the Brown Tree Snake potentially invading Hawaii, we find that pre-invasion expenditures on prevention are inverse U-shaped in the hazard rate. Efficient prevention should be approximately $2.9 million today and held constant until invasion. Once invasion occurs, optimal prevention requires $3.1 million annually and $1.6 million per year on species removal to keep the population at its steady state level, due to high search costs at very small population levels.
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Burnett, K., Pongkijvorasin, S. & Roumasset, J. Species Invasion as Catastrophe: The Case of the Brown Tree Snake. Environ Resource Econ 51, 241–254 (2012). https://doi.org/10.1007/s10640-011-9497-3
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DOI: https://doi.org/10.1007/s10640-011-9497-3