No. 12/2005

ON THE ECONOMICS OF BIOLOGICAL INVASION: AN APPLICATION TO RECREATIONAL FISHING

Jon Olaf Olaussen

Abstract:
The paper demonstrates four general mechanisms that may affect economically
valuable species when exposed to biological invasion. We distinguish between an ecological level effect and an ecological growth effect. In addition we present an economic quantity effect working through demand. Finally we suggest that there is an economic quality effect that reflects the possibility that invasions affect the harvesting agents directly through new demand-side forces. For example, this may occur because the state of the original species or the ecosystem is altered. We depart from the existing literature by revealing ecological and economic forces that explain why different agents may lack incentives to control invasions. The theoretical model is illustrated by the case where escaped farmed salmon influence wild Atlantic salmon fisheries.