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.
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Bibliographic InfoPaper provided by University of Central Missouri, Department of Economics & Finance in its series Working Papers with number 0807.
Length: 31 pages
Date of creation: May 2008
Date of revision: May 2008
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 08-08, Department of Economics, Appalachian State University.
- 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-2008-05-17 (Agricultural Economics)
- NEP-ALL-2008-05-17 (All new papers)
- NEP-ENV-2008-05-17 (Environmental Economics)
- NEP-ORE-2008-05-17 (Operations Research)
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