Abstract
Recently, Batabyal and Beladi (2009) have constructed a metric of the expected total monetary damage from the unintentional introduction of invasive species into a country called Home. In this note, we extend this line of inquiry by analyzing the statistical properties of this total monetary damage random variable. By “ statistical properties,” we mean the variance and the covariance. Specifically, we first compute the variance of the total monetary damage at time t. Next, we derive a closed-form expression for the covariance of the total monetary damage at time t and at time t+s where s> 0. Finally, we discuss three practical implications of our findings for the management of invasive species.
JEL Classification: Q56, C44
