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Stochastic Dominance, Entropy and Biodiversity Management

Author

Listed:
  • Catherine M. Chambers

    (University of Central Missouri)

  • Paul E. Chambers

    (University of Central Missouri)

  • John R. Crooker

    (University of Central Missouri)

  • John C. Whitehead

    (Appalachian State University)

Abstract

In 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.

Suggested Citation

  • 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.
    • Handle: RePEc:umn:wpaper:0807
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    References listed on IDEAS

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    JEL classification:

    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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