Stepping stones for biological invasion: A bioeconomic model of transferable risk

Herein we model the widespread dispersal and management of an invasive species as a weak-link public good. The risk of introduction is driven in part by economic activity, is influenced by policies directed at the risk, and economic activity responds/adapts to the risk. Framed around recent introductions and rapid spread of dreissenid mussels in the Western United States, we find three key results. First, partial equilibrium estimates of welfare loss are significantly overestimated relative to general equilibrium estimates. If ecosystem services and market goods are substitutes the partial equilibrium bias is greater than if they are compliments. Second, well-intended policies do not necessarily reduce overall risk; risk reduction actions can transfer risk to another time or location, or both, which may increase total risk. Third, policies of quotas and inspections have to be extreme to improve welfare, with inspections having advantages over quotas.