Species preservation versus development: An experimental investigation under uncertainty
AbstractThe safe minimum standard (SMS) is a decision rule to preserve renewable resources, unless the social costs of doing so are intolerable. While unpersuasive to many, support for the SMS has been advocated by some economists for settings involving irreversibility and a high degree of uncertainty. The objective of this paper is to explore decision-making involving species preservation versus development within an experimental laboratory setting, and involving uncertainty. The experimental design implements a number of prior game-theoretic investigations of the SMS (Bishop, 1978; Ready and Bishop, 1991; Palmini, 1999), involving insurance, and lottery or combined games against nature. The choices are between species preservation, which possibly provides a cure for a disease, or developing habitat, leading to irreversible depletion. Econometric results from a random parameters logit model, using responses from 117 participants (across both U.S. and Mexican university student samples) and 9 treatment choices, indicate that support for the SMS varies across the type of game, the imposed maximum regret condition concerning the relative magnitude of the costs of disease and net benefits of development, a constructed measure of respondents' risk aversion, and other factors. There is also strong evidence of unobservable heterogeneous preferences for preservation within our sample.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Ecological Economics.
Volume (Year): 70 (2011)
Issue (Month): 5 (March)
Contact details of provider:
Web page: http://www.elsevier.com/locate/ecolecon
Safe minimum standard Uncertainty Experimental Game against nature Endangered species;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- E. Roy Weintraub & Evelyn L. Forget, 2007. "Introduction," History of Political Economy, Duke University Press, vol. 39(5), pages 1-6, Supplemen.
- Hongbin Li & Mark Rosenzweig & Junsen Zhang, 2010.
"Altruism, Favoritism, and Guilt in the Allocation of Family Resources: Sophie's Choice in Mao's Mass Send-Down Movement,"
Journal of Political Economy,
University of Chicago Press, vol. 118(1), pages 1-38, 02.
- Hongbin Li & Mark Rosenzweig & Junsen Zhang, 2008. "Altruism, Favoritism, and Guilt in the Allocuation of Family Resources: Sophie's Choice in Mao's Mass Send Down Movement," Working Papers 965, Economic Growth Center, Yale University.
- Li, Hongbin & Rosenzweig, Mark & Zhang, Junsen, 2008. "Altruism, Favoritism, and Guilt in the Allocation of Family Resources: Sophie's Choice in Mao's Mass Send Down Movement," Working Papers 54, Yale University, Department of Economics.
- Michael Margolis & Eric Nævdal, 2008.
"Safe Minimum Standards in Dynamic Resource Problems: Conditions for Living on the Edge of Risk,"
Environmental & Resource Economics,
European Association of Environmental and Resource Economists, vol. 40(3), pages 401-423, July.
- Margolis, Michael & Naevdal, Eric, 2004. "Safe Minimum Standards in Dynamic Resource Problems—Conditions for Living on the Edge of Risk," Discussion Papers dp-04-03, Resources For the Future.
- Laury, Susan K. & Taylor, Laura O., 2008.
"Altruism spillovers: Are behaviors in context-free experiments predictive of altruism toward a naturally occurring public good,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 65(1), pages 9-29, January.
- Susan K. Laury & Laura O. Taylor, 2006. "Altruism Spillovers: Are Behaviors in Context-Free Experiments Predictive of Altruism Toward a Naturally Occurring Public Good?," Experimental Economics Center Working Paper Series 2006-14, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
- Weitzman, Martin L., 2009.
"On Modeling and Interpreting the Economics of Catastrophic Climate Change,"
3693423, Harvard University Department of Economics.
- Martin L. Weitzman, 2009. "On Modeling and Interpreting the Economics of Catastrophic Climate Change," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 1-19, February.
- Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
- Ferraro, Paul J. & McIntosh, Craig & Ospina, Monica, 2007. "The effectiveness of the US endangered species act: An econometric analysis using matching methods," Journal of Environmental Economics and Management, Elsevier, vol. 54(3), pages 245-261, November.
- Steffen Andersen & Glenn W. Harrison & Morten I. Lau & E. Elisabet Rutström, 2008. "Eliciting Risk and Time Preferences," Econometrica, Econometric Society, vol. 76(3), pages 583-618, 05.
- Greenstone, Michael & Gayer, Ted, 2009.
"Quasi-experimental and experimental approaches to environmental economics,"
Journal of Environmental Economics and Management,
Elsevier, vol. 57(1), pages 21-44, January.
- Michael Greenstone & Ted Gayer, 2007. "Quasi-Experimental and Experimental Approaches to Environmental Economics," Working Papers 0713, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
- Glenn W. Harrison & John A. List, 2004.
Journal of Economic Literature,
American Economic Association, vol. 42(4), pages 1009-1055, December.
- John A. List & Michael Margolis & Daniel E. Osgood, 2006. "Is the Endangered Species Act Endangering Species?," NBER Working Papers 12777, National Bureau of Economic Research, Inc.
- Calvin Blackwell & Michael McKee, 2010.
"Is There a Bias Toward Contributing to Local Public Goods? Cultural Effects,"
Forum for Social Economics,
Taylor & Francis Journals, vol. 39(3), pages 243-257, January.
- Calvin Blackwell & Michael McKee, 2010. "Is There a Bias Toward Contributing to Local Public Goods? Cultural Effects," Forum for Social Economics, Springer, vol. 39(3), pages 243-257, October.
- Karl C. Samples & John A. Dixon & KMarcia M. Gowen, 1986. "Information Disclosure and Endangered Species Valuation," Land Economics, University of Wisconsin Press, vol. 62(3), pages 306-312.
- Laibson, David, 1997.
"Golden Eggs and Hyperbolic Discounting,"
The Quarterly Journal of Economics,
MIT Press, vol. 112(2), pages 443-77, May.
- Daniel A. Haqen & James W. Vincent & Patrick G. Welle, 1992. "Benefits Of Preserving Old-Growth Forests And The Spotted Owl," Contemporary Economic Policy, Western Economic Association International, vol. 10(2), pages 13-26, 04.
- Gollier, Christian & Treich, Nicolas, 2003. " Decision-Making under Scientific Uncertainty: The Economics of the Precautionary Principle," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 77-103, August.
- Maribeth Coller & Melonie Williams, 1999. "Eliciting Individual Discount Rates," Experimental Economics, Springer, vol. 2(2), pages 107-127, December.
- Scott, Antony, 1999. "Trust law, sustainability, and responsible action," Ecological Economics, Elsevier, vol. 31(1), pages 139-154, October.
- Bryan G. Norton & Michael A. Toman, 1997. "Sustainability: Ecological and Economic Perspectives," Land Economics, University of Wisconsin Press, vol. 73(4), pages 553-568.
- Palmini, Dennis, 1999. "Uncertainty, risk aversion, and the game theoretic foundations of the safe minimum standard: a reassessment," Ecological Economics, Elsevier, vol. 29(3), pages 463-472, June.
- Robert P. Berrens & David S. Brookshire & Michael McKee & Christian Schmidt, 1998. "Implementing the Safe Minimum Standard Approach: Two Case Studies from the U.S. Endangered Species Act," Land Economics, University of Wisconsin Press, vol. 74(2), pages 147-161.
- LeRoy, Stephen F & Singell, Larry D, Jr, 1987. "Knight on Risk and Uncertainty," Journal of Political Economy, University of Chicago Press, vol. 95(2), pages 394-406, April.
- Cummings, Ronald G. & Martinez-Vazquez, Jorge & McKee, Michael & Torgler, Benno, 2009. "Tax morale affects tax compliance: Evidence from surveys and an artefactual field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 70(3), pages 447-457, June.
- Richard T. Woodward & Richard C. Bishop, 1997. "How to Decide When Experts Disagree: Uncertainty-Based Choice Rules in Environmental Policy," Land Economics, University of Wisconsin Press, vol. 73(4), pages 492-507.
- Gollier, Christian & Jullien, Bruno & Treich, Nicolas, 2000. "Scientific progress and irreversibility: an economic interpretation of the 'Precautionary Principle'," Journal of Public Economics, Elsevier, vol. 75(2), pages 229-253, February.
- Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
- Antonio FILIPPIN & Paolo CROSETTO, 2014.
"A Reconsideration of Gender Differences in Risk Attitudes,"
Departmental Working Papers
2014-01, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
- Filippin, A. & Crosetto, P., 2014. "A reconsideration of gender differences in risk attitudes," Working Papers 2014-01, Grenoble Applied Economics Laboratory (GAEL).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.