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Valuing Biodiversity from an Economic Perspective: A Unified Economic, Ecological, and Genetic Approach

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  • William A. Brock
  • Anastasios Xepapadeas

Abstract

We develop a conceptual framework for valuing biodiversity from an economic perspective. We argue for a dynamic economic welfare measure of biodiversity that complements the literature on benefit-cost approaches and genetic distance/phylogenic tree approaches. Using a unified model of optimal economic management of an ecosystem under ecological and genetic constraints, we identify gains from management policies leading to a more diverse system, using the Bellman state valuation function of the problem. We show that a more diverse system could attain a higher value although the genetic distance of the species in the more diverse system could be almost zero.

Suggested Citation

  • William A. Brock & Anastasios Xepapadeas, 2003. "Valuing Biodiversity from an Economic Perspective: A Unified Economic, Ecological, and Genetic Approach," American Economic Review, American Economic Association, vol. 93(5), pages 1597-1614, December.
    • Handle: RePEc:aea:aecrev:v:93:y:2003:i:5:p:1597-1614
    Note: DOI: 10.1257/000282803322655464
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