The North American Horticultural Industry and the Risk of Plant Invasion

Posted: 21 May 2012

See all articles by Edward B. Barbier

Edward B. Barbier

Colorado State University, Fort Collins - Department of Economics

Johnson Gwatipedza

University of Wyoming - College of Business - Department of Economics and Finance

Duncan Knowler

Simon Fraser University (SFU) - School of Resource and Environmental Management

Sarah Reichard

University of Washington - School of Environmental and Forest Sciences

Date Written: 2011

Abstract

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 mitigatethe damages resulting from any accidental plant invasion.

Keywords: Monopolistic competition, Exotic plant species, Biological invasion, Horticultural industry, Nurseries

JEL Classification: D43, Q29

Suggested Citation

Barbier, Edward B. and Gwatipedza, Johnson and Knowler, Duncan and Reichard, Sarah, The North American Horticultural Industry and the Risk of Plant Invasion (2011). Agricultural Economics, Vol. 45, pp. 743-759, 2011. Available at SSRN: https://ssrn.com/abstract=2062347

Edward B. Barbier (Contact Author)

Colorado State University, Fort Collins - Department of Economics ( email )

Fort Collins, CO 80523-1771
United States

Johnson Gwatipedza

University of Wyoming - College of Business - Department of Economics and Finance ( email )

P.O. Box 3985
Laramie, WY 82071-3985
United States

Duncan Knowler

Simon Fraser University (SFU) - School of Resource and Environmental Management ( email )

888 University Drive
Burnaby, British Colombia V5A 1S6
Canada
604-291-3421 (Phone)

Sarah Reichard

University of Washington - School of Environmental and Forest Sciences ( email )

Box 352100
Seattle, WA 98195-2100
United States

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