Can We Love Invasive Species to Death? Creating Efficient Markets for Invasive Species Harvests

Bounties and rebranding are an increasingly popular tool to control or eliminate invasive species that have consumptive values. However, there is concern that such policies will undermine eradication efforts and may exacerbate the spread of these species. We develop and apply an optimal dynamic harvesting model to identify policies that correct market failures associated with commercially valuable invasive species. Competing market failures imply that welfare-enhancing policies may either encourage or discourage harvesting of the invasive species. A species’ dual role as both a pest and commodity creates a nonconvexity that alters incentives to eradicate or exacerbate an invasion. We apply the model to the invasion of silver carp in the United States to show that many current carp subsidies are too low and identify a threshold level of rebranding effectiveness necessary to make rebranding a cost-effective policy choice compared to harvest subsidies.