Journal article
The Boundary of the Market for Biosecurity Risk
G Stoneham, SM Hester, JSH Li, R Zhou, A Chaudhry
Risk Analysis | Published : 2021
DOI: 10.1111/risa.13620
Open access
Abstract
Imported goods create value in destination countries but also create biosecurity risk. Although widely used in other domains of the economy, risk markets have not been created to manage losses that occur when exotic pests and diseases are introduced with traded goods. In this article we show that not all biosecurity risks are insurable. Losses arising from effort needed to detect and respond to exotic pests and diseases that breach national borders appear to be insurable because entry of these threats and consequent response costs, can be regarded as random events. As pests and diseases establish and spread, however, loss of access to export markets and productivity losses display systematic..
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Funding Acknowledgements
This research was supported by the Australian Government Department of Agriculture, Water and the Environment (DAWE), Biosecurity Queensland and the NSW Department of Primary Industries. The authors are particularly grateful to Matt Koval, Jo Laduzko, Pat Bell, Jim Groves, Scott Charlton, Andrew Sanger, and Robyn Hean for their support of this work. The formation of ideas also benefited from discussions with Paul Martin, Paul Downey, Andrew Robinson, Richard Bradhurst, and Mike Ormsby. We also thank staff from DAWE and two anonymous reviewers whose comments substantially improved the quality of the manuscript.