European Review of Agricultural Economics Advance Access originally published online on October 19, 2009
European Review of Agricultural Economics 2009 36(3):295-320; doi:10.1093/erae/jbp030
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The optimal amount and allocation of sampling effort for plant health inspection
Wageningen University, The Netherlands
Corresponding author: Alfons Oude Lansink, Business Economics, Wageningen University, P.O. Box 8130, EW-6700 Wageningen, The Netherlands. E-mail: alfons.oudelansink{at}wur.nl
Received February 2008; final version received April 2009
Plant import inspection can prevent the introduction of exotic pests and diseases, thereby averting economic losses. We explore the optimal allocation of a fixed budget, taking into account risk differentials, and the optimal-sized budget to minimise total pest costs. A partial-equilibrium market model is used to compute the economic consequences of pest invasion. An application to Dutch imports of chrysanthemum cuttings shows that the optimal allocation of a fixed inspection budget halves the cost of pest invasion compared to allocating the same budget equally over all imports. A budget increase that enables 42 per cent more inspection can reduce total societal costs by 81 per cent compared to smaller, constrained budget that ignores risk differentials.
Keywords: import inspection, quarantine, plant pests, budget constraints, resource allocation
JEL classification: Q18, Q13
* Review coordinated by Thomas Heckelei.