A bioeconomic supply model for Louisiana nutria and impacts on wetlands conservation associated with economic incentives

Nutria (Mayocastor) were first introduced to Louisiana in 1938. With few natural predators and high prolific productivity, they became well established in the surrounding coastal marsh within a few years. Prior to 1980’s, as a result of high demand for nutria products from European countries, harvest pressure was sufficient to keep the population in ‘check’ with their wetlands capacity. By the mid-1980’s, however, prices had fallen sharply, culminating in declining annual harvests and an increasing population. Because of their feeding habits, the increased nutria population has resulted in a substantial amount of wetland degradation. In this thesis, a long-run bioeconomic supply model for nutria is developed and the expected harvest associated with different bounties is incorporated into a wetland-loss model to investigate the extent to which alternative bounties lessen wetland degradation. With respect to the bioeconomic supply model, harvest per hectare is specified as a function of the harvested price per pelt, opportunity costs of the trapper, and the variables that impact the carrying capacity (a weather severity index and the alligator population density). Results suggest that MSY is achieved at a real price (based on 2000 Implicit Price Deflator) of approximately $17 and that MSY is equal to 1.5 million pelts when all explanatory variables, other than price, are held at their respective means. The signs of the coefficients of the explanatory variables are consistent with a priori expectations. As the alligator population density increases, long-run nutria harvest is expected to decline. Similarly, lower opportunity costs associated with the trappers’ time (measured via an increase in the unemployment rate) was found to result in an increase in long-run harvest. Based on incorporation of the predicted harvests associated with various bounties into the simulation model (i.e., a wetland-loss model), results suggest that wetland degradation is lessened in response to an increasing bounty. However, the results are highly sensitive to changes in the level of some parameters in the wetland-loss model such as the biomass destroyed-to-consumed ratio, the critical density, and time-to-maturity. Finally, a benefit cost analysis implies that the benefits associated with the various bounties outweigh the costs