The economics of invasive species, border enforcement, and firm response

Invasive species pose significant risks to U.S. agriculture and the global economy. The first two chapters of this dissertation explain the institutional framework and key actors involved in the problem of invasive species: importers (firms), border inspectors, pest populations, and policy makers. U.S. border enforcement, including agricultural inspections for invasive species (formally under the jurisdiction of the US Department of Agriculture), is now the province of Customs and Border Protection within the Department of Homeland Security. This transition has been contentious, as discussed in Chapter 2. Enforcement success is determined by multiple probabilities representing firm behavior, and Chapter 3 provides a joint probability model showing the effects of firm response on optimal policy formulation. The results show the conditions under which a firm is likely to invest in avoiding being inspected versus investing in reducing an inspection's effectiveness and thus when a regulator should invest in increasing inspection frequency versus increasing inspection efficacy.;The analysis in Chapter 4 presents a theoretical model of firm response to border enforcement and evaluates both the intended and unintended effects under two enforcement regimes: destruction versus treatment of contaminated shipments. The results indicate that importers may respond to increased inspection by reducing shipments and increasing due care, but under certain conditions, importers may decrease due care. In response to increased pest populations, firms may reduce shipments and increase due care, indicating that an enforcement response may not be necessary. The analysis reveals the importance of the nature of the due-care technology, as well as the relationships underlying the probability of detection, in determining the effects of enforcement.;Empirical approaches are discussed in Chapter 5 including proposed econometric approaches and agent-based modeling (ABM) techniques that extend the theoretical analysis. Econometric analysis could help to evaluate firm response to border enforcement given long- and short-term economic conditions. ABM simulations, using this dissertation's theoretical model of firm response to border enforcement, provide a promising means of evaluating how policy instruments and regulator behavior (i.e., inspection schemes, enforcement of fines) affect social welfare.