Stochastic Dominance, Entropy and Biodiversity Management
AbstractIn this paper we develop a model of population dynamics using the Shannon entropy index, a measure of diversity that allows for global and specific population shocks. We model the effects of increasing the number of parcels on biodiversity, varying the number of spatially diverse parcels to capture risk diversification. We discuss the concepts of stochastic dominance as a means of project selection, in order to model biodiversity returns and risks. Using a Monte Carlo simulation we find that stochastic dominance may be a useful theoretical construct for project selections but it is unable to rank every case. Key Words: Stochastic Dominance, Entropy, Biodiversity Management
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.
Bibliographic InfoPaper provided by Department of Economics, Appalachian State University in its series Working Papers with number 08-08.
Date of creation: 2008
Date of revision:
Contact details of provider:
Postal: Thelma C. Raley Hall, Boone, North Carolina 28608
Web page: http://www.business.appstate.edu/departments/economics/
More information through EDIRC
Other versions of this item:
- Catherine M. Chambers & Paul E. Chambers & John R. Crooker & John C. Whitehead, 2008. "Stochastic Dominance, Entropy and Biodiversity Management," Working Papers 0807, University of Central Missouri, Department of Economics & Finance, revised May 2008.
- Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-05-10 (Agricultural Economics)
- NEP-ALL-2008-05-10 (All new papers)
- NEP-ENV-2008-05-10 (Environmental Economics)
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.:
- Lueck, Dean & Michael, Jeffrey A, 2003. "Preemptive Habitat Destruction under the Endangered Species Act," Journal of Law and Economics, University of Chicago Press, vol. 46(1), pages 27-60, April.
- Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, 03.
- Martin L. Weitzman, 1998. "The Noah's Ark Problem," Econometrica, Econometric Society, vol. 66(6), pages 1279-1298, November.
- Golan, Amos & Judge, George G. & Miller, Douglas, 1996. "Maximum Entropy Econometrics," Staff General Research Papers 1488, Iowa State University, Department of Economics.
- Alavalapati, Janaki R. R. & Stainback, George A. & Carter, Douglas R., 2002. "Restoration of the longleaf pine ecosystem on private lands in the US South: an ecological economic analysis," Ecological Economics, Elsevier, vol. 40(3), pages 411-419, March.
- Weitzman, Martin L, 1992.
The Quarterly Journal of Economics,
MIT Press, vol. 107(2), pages 363-405, May.
- Weitzman, M.L., 1991. "On Diversity," Harvard Institute of Economic Research Working Papers 1553, Harvard - Institute of Economic Research.
- Wagayehu Bekele, 2005. "Stochastic Dominance Analysis of Soil and Water Conservation in Subsistence Crop Production in the Eastern Ethiopian Highlands: The Case of the Hunde-Lafto Area," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 32(4), pages 533-550, December.
- Simpson, R. David, 2002. "Definitions of Biodiversity and Measures of Its Value," Discussion Papers dp-02-62, Resources For the Future.
- Pablo Benítez & Timo Kuosmanen & Roland Olschewski & G. Cornelis van Kooten, 2004.
"Conservation Payments under Risk: A Stochastic Dominance Approach,"
2004-05, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
- Pablo C. Ben�tez & Timo Kuosmanen & Roland Olschewski & G. Cornelis van Kooten, 2006. "Conservation Payments under Risk: A Stochastic Dominance Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 1-15.
- Pablo Benítez & Timo Kuosmanen & Roland Olschewski & G. Cornelis van Kooten, 2005. "Conservation Payments under Risk: A Stochastic Dominance Approach," Working Papers 2005-14, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
- Robert Innes & Stephen Polasky & John Tschirhart, 1998. "Takings, Compensation and Endangered Species Protection on Private Lands," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 35-52, Summer.
- Loomis, John B. & White, Douglas S., 1996. "Economic benefits of rare and endangered species: summary and meta-analysis," Ecological Economics, Elsevier, vol. 18(3), pages 197-206, September.
- Hans-Peter Weikard, 2002. "Diversity Functions and the Value of Biodiversity," Land Economics, University of Wisconsin Press, vol. 78(1), pages 20-27.
- Gardner M. Brown & Jason F. Shogren, 1998. "Economics of the Endangered Species Act," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 3-20, Summer.
- Montgomery Claire A. & Brown Jr. , Gardner M. & Adams Darius M., 1994. "The Marginal Cost of Species Preservation: The Northern Spotted Owl," Journal of Environmental Economics and Management, Elsevier, vol. 26(2), pages 111-128, March.
- Solow Andrew & Polasky Stephen & Broadus James, 1993. "On the Measurement of Biological Diversity," Journal of Environmental Economics and Management, Elsevier, vol. 24(1), pages 60-68, January.
- Haim Levy, 1992. "Stochastic Dominance and Expected Utility: Survey and Analysis," Management Science, INFORMS, vol. 38(4), pages 555-593, April.
- Weitzman, Martin L, 1993. "What to Preserve? An Application of Diversity Theory to Crane Conservation?," The Quarterly Journal of Economics, MIT Press, vol. 108(1), pages 157-83, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (O. Ashton Morgan).
If references are entirely missing, you can add them using this form.