A Review of Literature on the Economics of Invasive Species

There is increased demand within the regulatory processes of the United States Department of Agriculture (USDA) for a higher level of analysis that integrates pest risks with economic considerations. This paper reviews the literature of methodological developments and empirical analyses over the past decade that potentially enhance such studies. Policy-oriented economic benefit-cost analysis that integrates risk assessment and related mitigation and control costs has to incorporate three components into an inter-disciplinary framework. The first component is based purely on risk science, such as probabilities of pest risk of infestations or transmission, or procedures for control of pest outbreaks. The second component inherently involves a mixture of pest risk science and economic considerations, such as an assessment of the effectiveness of specific mitigation or pest control measures and their likely economic cost. The third component is based purely on economics in that it involves the construction of the economic model in which the specific and net effects of alternative policy decisions are evaluated, taking information from the first two components into account.