The optimal time to remove quarantine bans under uncertainty: The case of Australian bananas

Anke Leroux, Donald MacLaren

Research output: Contribution to journalArticleResearchpeer-review

Abstract

Import restrictions on biological materials are used widely as protection against exotic invasive pests and pathogens. While a scientific risk assessment is needed to justify an import ban under the WTO SPS Agreement, economics plays little role in determining the choice of import regime. Using a real option framework, we model the uncertain and irreversible costs from lifting an import ban and derive decision rules about the optimal timing, when ex ante research and development yields positive but uncertain benefits. The insights gained are applied to Australia s current import policy for bananas.
Original languageEnglish
Pages (from-to)140 - 152
Number of pages13
JournalEconomic Record
Volume87
Issue number276
DOIs
Publication statusPublished - 2011
Externally publishedYes

Cite this

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The optimal time to remove quarantine bans under uncertainty: The case of Australian bananas. / Leroux, Anke; MacLaren, Donald.

In: Economic Record, Vol. 87, No. 276, 2011, p. 140 - 152.

Research output: Contribution to journalArticleResearchpeer-review

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