OPTIMAL MANAGEMENT OF A COMMON PROPERTY PEST UNDER RISK: AN APPLICATION TO THE CORN ROOTWORM

An integrated pest management model is developed for the northern corn rootworm, Diabrotica longicornis, and the western corn rootworm, Diabrotica virgifera, insect pests of corn. Uncertainty and risk aversion are incorporated into an economic threshold model. Two control actions, soil insecticide and crop rotation, are included. The effect of crop insurance and improved scouting accuracy on insecticide use is evaluated. The rootworm population is considered to be a common property resource with an exhaustible stock of susceptibility to insecticide. A second objective of the study is to evaluate the potential benefits of a regional approach to corn rootworm control, internalizing the externalities of insecticide resistance and pest movement among farms. A genetic model is used as the basis for predicting the influence of insecticide use rate on resistance buildup. The regional approach is compared with an individual farm approach in an intertemporal optimization model solved by nonlinear programming.;A slight gain in profits, less than one percent, is achieved with coordination of control actions in the regional approach. Much of the gain is due to a preservation of insecticide effectiveness. Insecticide and crop rotation with a substitute crop, soybeans, are alternative rootworm control measures. The size of the gain in profits depends very much on the availability and profitability of substitute crops. Where the substitute crop is less profitable, insecticide use increases. The gain from preserving insecticide effectiveness then increases.;The empirical results indicate that increased risk aversion reduces the economic threshold for insecticide application. Increased risk aversion also reduces the economic threshold for crop rotation when corn has a large comparative advantage over soybeans. The effect of risk aversion on insecticide use is uncertain. Increased risk aversion may increase "insurance" insecticide applications on lightly infested fields, but may also lead to diversification to another crop on heavily infested fields. Crop insurance increases insecticide-treated corn acreage slightly for the risk-averse firm. Improved scouting accuracy reduces insecticide use slightly for the risk-averse firm.