ABSTRACT
From an economic perspective, an exotic species is invasive when its costs exceed its benefits. A species’ costs include damage or harm to production, use, trade and other agricultural and ecological benefits, in addition to costs of excluding and managing the species, where benefits and costs can be monetary and non-monetary. Its benefits include net returns, satisfaction from use and agricultural or environmental benefits, such as pest control (e.g. Hlasny and Livingston, 2008). Invasive species should be excluded or managed when the activity’s benefits, derived from preventing or reducing species’ net damage or costs, exceed the activity’s economic and environmental costs. Evaluations of exotic and invasive species and decisions to exclude or manage species express people’s objectives, values and preferences in response to economic incentives, within market and institutional structures. However, biological factors, especially the potential entry, spread, increase and damage of invasive species in agricultural or ecological systems, can affect the market valuation of benefits and costs and create unique economic decision and public policy issues. This chapter examines economic decisions, important economic and institutional factors and public policy issues related to exotic and invasive species, focusing on the USA.
