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
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Bibliographic InfoPaper provided by Department of Economics, Appalachian State University in its series Working Papers with number 08-08.
Date of creation: 2008
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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)
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