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Listing and Delisting Thresholds under the Endangered Species Act

Author

Listed:
  • Charles Sims
  • David Finnoff
  • Alan Hastings
  • Jacob Hochard

Abstract

We consider the case where a species provides a flow of economic benefits, is at risk of extinction, and is being considered for addition to the Endangered Species List. Listing a species as endangered is costly but increases the flow of social benefits and reduces the likelihood of extinction. If the species recovers sufficiently, additional costs can be incurred to subsequently delist the species. By treating listing and delisting as a pair of linked investment options, we provide an alternative to current practice for listing and delisting decisions that maximizes the return from public conservation investments. Under this alternative framework, we show that economic considerations may actually afford greater protection for at-risk species if these decisions are initiated early. However, biological sources of uncertainty may cause those species most in need of protection to be passed over in favor of more stable species that represent a “sure bet” for species preservation.

Suggested Citation

  • Charles Sims & David Finnoff & Alan Hastings & Jacob Hochard, 2017. "Listing and Delisting Thresholds under the Endangered Species Act," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(3), pages 549-570.
  • Handle: RePEc:oup:ajagec:v:99:y:2017:i:3:p:549-570.
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    File URL: http://hdl.handle.net/10.1093/ajae/aaw094
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    Citations

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    Cited by:

    1. Sloggy, Matthew R. & Kling, David M. & Plantinga, Andrew J., 2020. "Measure twice, cut once: Optimal inventory and harvest under volume uncertainty and stochastic price dynamics," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    2. Jacob LaRiviere & David Kling & James N Sanchirico & Charles Sims & Michael Springborn, 2018. "The Treatment of Uncertainty and Learning in the Economics of Natural Resource and Environmental Management," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 12(1), pages 92-112.
    3. Malone, Trey & Melstrom, Richard T., 2020. "Where’s the beef? Cattle producers’ response to endangered species listings," Food Policy, Elsevier, vol. 91(C).
    4. Jacob P. Byl, 2021. "Three Barriers to Effective Programs with Payment for Ecosystem Services: Behavioral Responses in a Computer-Based Experiment," Sustainability, MDPI, vol. 13(22), pages 1-17, November.

    More about this item

    Keywords

    Endangered species; compound option; optimal switching; uncertainty; irreversibility;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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