Coasean economics and the evolution of marine property in Hawaii

The standard view that the absence of property rights is inefficient contradicts the Coasean proposition that the relative efficiency of different institutions depends on their ability to economize on transaction costs. Moreover, the comparative theory of open access and private property institutions fails to recognize the intermediate institution of common property, finesses dynamic optimization, and provides an incomplete account of governance. We provide a comparative statics framework for alternative modes of resource management, albeit one that allows for dynamic optimization, and show that open access can be efficient under conditions of low population pressure. We show that the intensification of production with population pressure in Hawaii co- evolved with specialization and increased governance, in accordance with the efficiency theory. Instead of market-based specialization, however, economic organization in pre-contact Hawaii was hierarchically determined via top-down management of the ahupua´a.Demsetz, property rights, Hawaiian history, specialization, decentralization

From Rites to Rights: the Co-evolution of Political, Economic and Social Structures

It is the charge of economic history not only to explain the economic past, but to use it to enrich and develop economic theory (North, 1994). In paleoeconomics, theory plays the additional role of adding veracity of accounts based on sparse evidence through the demonstration of internal consistency. We synthesize pre-historical and historical evidence available from the settlement and modernization of the Hawaiian economy into a stylized picture of the co-evolution of production and governance structures called the governmental Kuznets curve. We explain the co-evolution with a theory of institutional change that includes the roles of resource scarcity and opportunities for internal and external economies of scale in the increasing intensification and specialization of production. These are facilitated first by a steeper and then by a flatter political organization.Paleoeconomics, governance, institutional change, Hawaiian economy, intensification, specialization

Coasean Economics and the Evolution of Marine Property in Hawaii

The standard view that the absence of property rights is inefficient contradicts the Coasean proposition that the relative efficiency of different institutions depends on their ability to economize on transaction costs. Moreover, the comparative theory of open access and private property institutions fails to recognize the intermediate institution of common property, finesses dynamic optimization, and provides an incomplete account of governance. We provide a comparative statics framework for alternative modes of resource management, albeit one that allows for dynamic optimization, and show that open access can be efficient under conditions of low population pressure. We show that the intensification of production with population pressure in Hawaii co-evolved with specialization and increased governance, in accordance with the efficiency theory. Instead of market-based specialization, however, economic organization in pre-contact Hawaii was hierarchically determined via top-down management of the ahupua´a.Demsetz, property rights, Hawaiian history, specialization, decentralization

Water Management and the Valuation of Indirect Environmental Services

Comprehensive water basin and watershed planning and management require valuation of the intermediate ecological services provided to the water resources themselves. Valuation of forest cover in the augmentation of water resources is discussed in the context of aggregate economic planning, water-basin or sectoral planning, and conservation project evaluation. The importance of valuing intermediate non-market goods is illustrated for each planning tool in the context of an illustrative example of the Pearl Harbor/Ko'olau watershed in Hawaii. In the context of water allocation and investment in waterworks, considerations of full income valuation imply that the value of water should incorporate the risk of watershed degradation contingent on the expected conservation effort. What appear to be new objectives of economic planning, such as sustainable development, do not require new criteria but rather the augmentation of existing methods of income accounting and project valuation to include the values on non-market goods. We also show that measurement of non-market valuation does not necessarily require the use of contingent-valuation methods, even when the usual alternatives (hedonics, household production, etc.) are not directly applicable.

Economic Impacts of E. Coqui frogs in Hawaii

Eleutherodactylus coqui, a small frog native to Puerto Rico, was introduced to Hawaii in the late 1980s, presumably as a hitchhiker on plant material from the Caribbean or Florida (Kraus et al. 1999). The severity of the frogs' songs on the island of Hawaii has lead to a hypothesis touted both in the scientific community and in the popular media that the presence of the frog on or near a property results in a decline in that property's value. The objective of this study is to explicitly test the extent to which this hypothesis is true, and if it is, what the level of localized damage incurred on a property's value is. The invasion began on either Hawaii or Maui, and has now expanded to Oahu and Kauai. Spread has occurred through the movement of nursery plants and through intentional introduction of the frogs to previously uninfested areas. The coqui frogs have attained some of the highest densities ever observed for terrestrial amphibian populations (up to 133,000 per ha on Hawaii). These extremely dense populations have lead to both economic and ecological concerns, especially on the island of Hawaii. The loud mating song of the male frogs is the most widely cited complaint in Hawaii. The frog's song has been measured to range in the 80-100 decibel level (Beard and Pitt 2005). Given that 45 decibels may be enough to prevent the average person from sleeping , the song of the coqui is considered a form of noise pollution in Hawaii. In this study we focus only on the direct damage costs of the coqui's loud mating songs through a hedonic pricing model. Because this only one component of the economic costs of noise pollution, it should be considered a lower bound estimate of the true cost of their noise and their presence. Since this lower bound is generated through measurable losses in property value, its use in invasive species policy should be welcomingly straightforward compared to survey methods or other efforts to quantify damages from ecosystem change. We find that coqui frogs do impose localized damages to real estate values, but by 800 meters distance from a complaint this damage is declining relative to the effect at 500m. The per-transaction reduction in value when frog complaints have been lodged within 500m appears to be about 0.16%, holding constant district, acreage, financial conditions, zoning, and neighborhood characteristics. This is just over 1/3 of the impact that an increase of 1% in mortgage rates is estimated to have on price.Land Economics/Use,

Control of Invasive Species: Lessons from Miconia in Hawaii

Once established, invasive species can rapidly and irreversibly alter ecosystems and degrade the value of ecosystem services. Optimal control of an exotic pest solves for a trajectory of removals that minimizes the present value of removal costs and residual damages from the remaining pest population. The shrubby tree, Miconia calvescens, is used to illustrate dynamic policy options for a forest invader. Potential damages to Hawaii's forest ecosystems are related to decreased aquifer recharge, biodiversity, and other ecosystem values. We find that population reduction is the optimal management policy for the islands of Oahu, Maui, and Hawaii. On the island of Kauai, where tree density is lower and search costs higher, optimal policy calls for deferring removal expenditures until the steady state population is reached.

Control of Invasive Species: Lessons from Miconia in Hawaii

Once established, invasive species can rapidly and irreversibly alter ecosystems and degrade the value of ecosystem services. Optimal control of an exotic pest solves for a trajectory of removals that minimizes the present value of removal costs and residual damages from the remaining pest population. The shrubby tree, Miconia calvescens, is used to illustrate dynamic policy options for a forest invader. Potential damages to Hawaii's forest ecosystems are related to decreased aquifer recharge, biodiversity, and other ecosystem values. We find that population reduction is the optimal management policy for the islands of Oahu, Maui, and Hawaii. On the island of Kauai, where tree density is lower and search costs higher, optimal policy calls for deferring removal expenditures until the steady state population is reached.Environmental Economics and Policy,

Beyond the Lamppost: Optimal Prevention and Control of the Brown Treesnake in Hawaii

In this paper, an integrated model for the prevention and control of an invasive species is developed. The generality of the model allows it to be used for both existing and potential threats to the system of interest. The deterministic nature of arrivals in the model allows for a clear examination of the tradeoffs inherent when choosing between prevention and control strategies. We illuminate how optimal expenditure paths change in response to various biological and economic parameters for the case of the Brown treesnake in Hawaii. Results suggest that it is more advantageous to spend money finding the small population of snakes as they occur than attempting to prevent all future introductions. Like the drunk that looks for his keys only where the light is, public policy may fail to look “beyond the lamppost” for snakes that have already arrived but have not yet been detected. Actively searching for a potential population of snakes rather than waiting for an accidental discovery may save Hawaii tens to hundreds of millions of dollars in future damages, interdiction expenditures, and control costs.invasive species, brown tree snake, Boiga irregularis, prevention and control, Hawaii

Prevention, Eradication, and Containment of Invasive Species: Illustrations from Hawaii

Invasive species change ecosystems and the economic services such ecosystems provide. Optimal policy will minimize the expected damages and costs of prevention and control. We seek to explain policy outcomes as a function of biological and economic factors, using the case of Hawaii to illustrate. First, we consider an existing invader, Miconia calvescens, a plant with the potential to reduce biodiversity, soil cover, and water availability. We then examine an imminent threat, the potential arrival of the Brown treesnake (Boiga irregularis). The arrival of the snake in Guam has led to native bird extirpations, power outages, and health costs.invasive species, bioeconomics, optimal control, Miconia calvescens, Boiga, Resource /Energy Economics and Policy,

Remaking of invasive species management: The RKC fishery in Norway

The importance of land infrastructure for supporting coastal fisheries has long been acknowledged;  its role in remote and geographically challenged fishing communities in the Nordic Arctic has visibly impacted community structure and development. This paper explores the Red King Crab (RKC) fishery in Norway and the ways in which its management has been changing the socioeconomic landscape in Northern Finnmark since the beginning of commercial exploitation in the early 2000’s. The RKC in the Barents Sea is an intentionally introduced species that is viewed both as a nuisance and as a valuable economic resource. This induces ambivalent preferences among local stakeholders and decision-makers in Norway. Although the management challenge of invasive species with multiple roles is not new, there has been scant coverage of the underlying bioeconomic trade-offs. Low harvesting costs, uncertain ecosystem losses and ongoing infrastructure investment in onshore landing facilities all shape stakeholders' interests in Norway in favor of a long-term management of the fishery. Simultaneously the political willingness to support local coastal communities and livelihoods in northern Norway provides significant impetus for maintaining a long-term stock, particularly in Eastern Finnmark. The ongoing infrastructure investments favor regional stakeholders over more diffuse and less clearly identified interests in the ecosystem changes induced by the invasive crab