Incentives for individual and cooperative management of a mobile pest: An application to the olive fruit fly in California

Institutions for collective action can effectively mitigate a harmful externality. However, the viability of such institutions hinges on the degree to which participants differ. This dissertation examines heterogeneity among growers affected by a mobile pest. In this case, the treatment decisions by some affect the pest stock harming others. To mitigate losses from infestation, one tool available to growers is the pest control district (PCD). The analyses in this dissertation describe the biological and economic factors that drive heterogeneity in management incentives among growers, and the consequences for the formation and operation of a PCD.;The empirical application used throughout is the olive fruit fly in California. Chapter 2 develops and estimates a pest damage function, using an exceptional dataset collected by entomologists. The econometric model accounts for simultaneity that arises because common factors affect both pest population dynamics and host susceptibility. The estimated damage function aptly reflects biologically-driven heterogeneity in infestation rates across hosts. The implication for pest management is that growers may combat infestation by targeting the pest population or by manipulating host susceptibility.;Given randomness in common factors, mainly temperature, Chapter 3 incorporates both types of management tactics into a stochastic dynamic programming model of the incentives facing individual growers. The model allows growers to apply an insecticide at numerous times during the growing season, but growers may also curtail the growing season to reduce damage. Calibrated to various cultivars and growing regions, the results suggest that growers will change harvest timing to reduce their use of insecticide treatments. Some growers avoid insecticide use altogether by harvesting early.;Chapter 4 examines the individual benefits to membership in a PCD with heterogeneous commercial and non-commercial growers of a host. The analysis suggests that growers who eliminate insecticide treatments with early harvest lose 5.4-7.0 percent of seasonal returns by participating. In many cases, the estimated gains to other producers exceed these losses. However, the code governing PCDs in California mandates that all producers contribute a uniform levy to fund the institution. Redefining the structure of PCDs to reflect heterogeneity in returns to membership may enhance institutional efficiency and encourage cooperation among growers.