The Economics of
Hawaii’s Invasive Species
Kimberly M. Burnett
University of Hawaii at Manoa
Department of Economics
What is an “Invasive Species”?
•
An “invasive species” is defined as a species that is
1.
non-native (or alien) to the ecosystem under consideration and
2.
whose introduction causes or is likely to cause economic or
environmental harm or harm to human health.
Executive Order 13112, President Clinton, 1999
•
Invasive species can be plants, animals, and other
organisms (e.g., microbes). Human actions are the
primary means of invasive species introductions.
Hawaii as a Laboratory
• Most isolated place on earth
• Lots at risk: biodiversity, tourism, “paradise”
• Potential to keep things out
• Why do we see increasing invasion?
•
•
•
•
Increased trade
Globalization, disappearance of borders
Ease of mobility
Intentional introductions: driven by individual benefits;
without accounting for potential social costs
Invasive Species as Externalities
• Intentional introductions
• Agriculture/Aquaculture (Apple snails)
• Horticulture (Miconia)
• Pet trade (Salvinia)
• Unintentional introductions
• Floriculture trade (Coqui)
• Transport (Brown treesnake)
Outline
•
•
•
•
Threat from invasives
Policy
Bioeconomics (interdisciplinary problem)
3 case studies:
• Existing invader
• Potential invader
• Explosive invader
• Conclusions for economics/policy
• Conclusions for biology
Threat from Invasives
• Economic:
• Direct damages to physical
capital
• Direct damages to human
health
• Direct damages to natural
resource assets
• Ecological:
• Ecosystem change
• Water quality/ quantity
• Soil conditions
• Loss of biodiversity
• Loss of resilience
• Loss of productive
resources
Threats to Hawaii
Economic
(market value)
Ecological
(nonmarket value)
Miconia
Water
Endangered species
Brown
treesnake
Power outages,
medical costs
Endangered species
Coqui
Property values
Endangered species,
influence on snake
Miconia landslide, Tahiti
Role of Policy for Invasive Species
• Policy currently fragmented and inefficient
• Black lists
• Inspections
• Control efforts
• Biological and economic tools must be used together to
target policies that minimize disturbances to economy and
environment
• Successful policy will integrate prevention and control
decisions
Prevention and Control
Prevention
• Reduce entrance
vectors
• Interdiction at source
• Interdiction at
destination
Control
• Eradication
• Population reduction
• Containment
• Adaptation
Planning Optimal Policy
• Prevention and control decisions should be integrated and
incorporate expected damages
• Need to include both ecological and economic factors:
Biological capacity
Reproduction
Relative isolation
Habitat
Competitors
Predators
Entrance vectors
Rate of transport
Adaptability
Costs
Risks
Damages
Biology + Economics = Bioeconomics
• Biology (and ecology and hydrology): how fast does it
grow, where is it now, where is it going, how will it affect
other species…
• Economics: cost of control, value of expected damages
• Show why all are necessary through case studies
The Existing Invader: Miconia calvescens
• Native to South America
• Intentionally introduced to a Big
Island nursery in 1960’s
• Attractive purple and green leaves
• Aggressive growth
• Long-lived seed bank
• Shallow roots
• Forms monotypic stands, dense
canopy
• “Purple plague”
• “Green cancer”
• Present on 4 main islands
Biology: How Fast Does it Grow?
Island
Carrying capacity
Kauai
15,849,057
Oahu
8,713,551
Maui
14,133,791
Hawaii
78,216,124
Molokai
3,087,479
g(n)
600000
500000
400000
300000
200000
100000
0
n
0
2000000
4000000
6000000
8000000
Where K = 100 trees per acre above
1800 mm/yr rainfall line
Ecology: Endangered Species
Hydrology: Potential Watershed
Change from Invasion
• Reduction in groundwater speeds up depletion of aquifer, increases
water prices and need for desalination
• Increase in sedimentation decreases water quality and viability of
forest and nearshore resources
Rainfall
Runoff (sediments)
Marine
ecosystem
Watershed
Economics: The Value of Losing
Birds & Water
mgd lost
recharge
(annual)
Island
# birds
Low
Total annual damages by island
(millions)
High
Low
Medium
High
Kauai
22
3.2
3.9
$91.6
$154.0
$234.0
Oahu
13
3.2
3.9
$61.4
$98.5
$145.0
Maui
17
3.7
4.6
$77.8
$126.0
$187.0
20
18.0
22.0
$169.0
$225.0
$297.0
11
N/A
N/A
$36.9
$68.2
$108.0
Big Island
Molokai
Economics: Cost of Control?
Island
Search Constant
($1000*acre)
Search Coefficient
(g)
Kauai
$158,490,570
1.6095
Oahu
$87,135,510
1.6258
Maui
$141,337,910
1.6089
Big Island
$782,161,240
1.6028
Molokai
$30,874,790
1.6
Treatment
Coefficient
$13.39
Current Population?
Island
n(0)
Kauai
1,540
Oahu
6,890
Maui
111,050
Hawaii
315,000
Molokai
0
Optimal Population
Island
n(0)
n*
Kauai
1,540
9,171
Oahu
6,890
5,495
Maui
111,050
8,901
Hawaii
315,000
39,937
Molokai
0
0
Policy Comparisons
Island
Policy
Do nothing
Remain at
current population
forever
Status quo
spending
Optimal policy
of population reduction
and maintenance
Oahu
$3.08 b
$10.5 m
$16.9 m
$10.4 m
Maui
$4.6 b
$73.5 m
$51.7 m
$17.2 m
Recap
• Population reduction optimal for most islands.
• May be preferable to let population increase on Kauai (search costs high
relative to damage)
• For Molokai, optimal to spend on prevention and keep at zero
• Difficulty with nonmarket valuation (true value of endangered birds, etc.).
The Potential Invader: Brown Treesnake
• Native to New Guinea/Australia
• Accidentally introduced to Guam
during WW2
• Heavy transport btw Guam and
Hawaii (esp. military)
• 8 intercepted at HI ports since 1980
• Survived trip from Guam to Texas
for months in a washing machine
• Hitchhikes in wheels of airplanes,
hidden in cargo
• Mildly venomous
• “Just a matter of time” (and money)
Biology: Growth
Ecology: Biodiversity Losses
Economics: Damage
• Based on Guam,
• Power outage costs: $121.11 /snake
• Snakebite costs: $0.07 /snake
• Biodiversity: $0.32 – $1.93 /snake
• Loomis and White (1996)
• Total expected damages: $122.31 per snake
Economics: Control Cost
• Catching 1 out of 1: $100 million (?)
• Catching 1 out of 100: $100,000
• Catching 1 out of 39m: $0.64
Arrival Function
Annual arrivals
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
0
2
4
6
8
10
Prevention expenditure (millions)
12
Optimal Prevention and Control
Expenditures
control
C(x*)=$10 m
$6 m
Optimal population n = 543
y*=$ 84,000
prevention
Policy Comparisons
Current
population
(uncertain!)
Status quo spending
Optimal policy
0
$106 m
$81 m
50
$101 m
$87 m
Recap
• If zero snakes, spend heavily on prevention
• If more than zero snakes, spend on control
• May be large returns to early detection of small
populations
• Uncertainty about current population warrants
diversification between strategies
The Explosive Invader: Coqui Frog
Coqui photos: USDA/APHIS/NWRC Hilo Field Station
“ko-KEE”
Full chorus
• Native to Puerto Rico
• Introduced to Hawaii late 1980s
through nursery trade
• Spread to 4 islands by
movement of plant material and
intentional introductions
• No external tadpole stage; does
not require standing water; 2
week breeding cycle
• Have attained some of the
highest densities ever observed
for terrestrial amphibian
populations (up to 133,000 per
ha on Hawaii)
• New populations being reported
weekly
Falling Property Prices?
Hedonic Pricing Theory
• Wish to explain determinants of total property price
• Some things add to price, others subtract
• Structural
• Number of rooms, number of bathrooms, square footage (+)
• Acreage (+)
• Neighborhood/Accessibility
• Proximity to public transportation, school districts, other amenities (+/–)
• Zoning (+/–)
• Environmental
• Presence of coqui (–???)
• Elevation (+)
• Financial
• Mortgage rates (–)
• Buyer in HI (–)
• Derive implicit value of each characteristic from explicit price of property
using multiple regression analysis
Study Site and Data
•
50,033 real estate transactions on Big Island, 1995-2005
•
9 main districts (see map) divided into 10 sub-districts each to control for
neighborhood characteristics
•
SFLA to represent structure
•
Frog complaints registered to NWRC Hilo, 1997-2001
•
Use GIS to identify property transactions occurring after complaint, within
500m and 800m of frog complaints
•
Financial variables
• Prices deflated using West Urban CPI
• 30 year mortgage rates from Federal Reserve
• Buyer residing in HI used to control for information effects
Percentage of Transactions
with Frog Complaints Prior to Sale
Region
Average
Price
Frogs
500m
Frogs
800m
Average
Acres
N. Obs.
Puna
$26,555
19.3%
34.1%
2.6
24,019
S Hilo
$126,141
5.7%
23.2%
10.8
4,443
N Hilo
$283,383
7.0%
7.0%
18.2
633
Hamakua
$154,732
10.0%
25.5%
38.2
928
N Kohala
$202,599
33.7%
42.9%
10.4
1,758
S Kohala
$409,796
37.3%
48.4%
6.8
3,479
N Kona
$334,393
13.2%
33.9%
2.9
6,733
S Kona
$773,204
23.5%
40.6%
21.7
2,064
Kau
$25,179
15.1%
23.8%
8.7
5,981
Puna Close-up
Frogs within 500 m
Frogs within 800 m
Transactions
Impact on Property Price
Variable
Frogs 500m
Frogs 800m
Frogs
-135,957***
(19327)
-6,816
(7845)
SFLA
67***
(4)
64***
(4)
Assessed Land Val
0.5***
(0.2)
0.5***
(0.2)
Acres
471**
(190)
474**
(191)
Mortgage rate
(monthly)
-25,494***
(4043)
-17,237***
(3917)
Buyer in HI
-24,981***
(9470)
-24,969***
(9479)
Constant
212,062***
(28833)
139,301***
(27384)
Number of observations
Adj R2
50,033
50,033
0.2
0.2
***,** indicate statistical significance at 99% and 95% confidence respectively
Huber-White Robust Standard errors in parentheses.
Recap
• Presence of frogs have a negative impact on property value
• Tells us nothing about optimal policy (don’t know the response
of population to spending)
• Need to build model of frog population response to spending if
want to evaluate policy options
Limitations
• General
• Nonmarket values controversial/hard to measure
• Miconia
• How to deal with seed bank (is zero really zero?)
• Lack of spatial considerations
• Brown treesnake
•
•
•
•
•
“Not here”, so…
Uncertain about population
Uncertain about annual arrivals
Unknown control costs
Lack of spatial considerations
• Coqui
• Ecological threats not accounted for
Directions of Future Research
• Miconia
• Better data on: current number of trees on each island, growth,
costs, locations
• Brown treesnake
• Early detection/rapid response
• Probabilistic model
• Coqui
• Real estate analysis: increase years of BI data, add Maui data
• Calculate lost profits to horticultural industry from
• Reduced revenues from lost sales if infested
• Increased costs from removing frogs for certification
• Model the increase in potential viability of brown treesnake and
accompanying increase in potential damages (biodiversity loss,
power supply and medical expenses) due to coqui prey base
Conclusions
• Invasive species can cause real economic damage
• Eradication not necessarily preferred over population
maintenance or adaptation
• An ounce of prevention not necessarily “worth a pound of
cure”
• Optimal policy will depend on economic as well as
ecological characteristics of an invasion
• Essential to consider benefits versus costs over some time
horizon
Acknowledgements
James Roumasset, Brooks Kaiser, William Pitt,
Sean D’Evelyn, and Porntawee Nantamanasikarn