Economic assessment of an insect pollinator decline: A general equilibrium analysis (original) (raw)

Economic assessment of insect pollinator decline 3 dimension is there and we gain the possibility to grasp more information about the sensitivity and the intensity of the reactions following the shock. We do so first for symmetric agents under, alternatively, the egalitarian and the polarized ownership structures. Then we introduce heterogeneity between producers, due to a technological parameter, and we revisit again, alternatively, the two ownership structures. As it turns out, the ownership structure is crucial to appraise the effect of the ecological shock. The main result is that, under the egalitarian distribution of property rights, all the agents suffer from the shock, hence there is a reduction of welfare; by contrast, under the polarized structure, the agent who possesses the pollinated activity experiences an utility reduction, whereas the other agent can experience a higher utility. This result holds when: 1) either the elasticity of substitution between the two consumption goods is sufficiently high, 2) or when the non pollinated sector is relatively more productive than the pollinated sector. In either case, welfare can increase if the second agent is granted a relatively more important weight in the social welfare criterion. The last section discusses the results and suggests some perspectives.