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Ulysses Revisited - A Closer Look At The Safe Minimum Standard Rule

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  • Rolfe, John

Abstract

The Safe Minimum Standard (SMS) Rule has been developed as a decision rule involving environmental assets, particularly species, that face some risk of extinction. The SMS rule has been presented by Bishop (1978) (1979) and Randall (1991) as a better decision process than the use of cost benefit analysis (CBA). This paper explores the relationship between the SMS rule and CBA. It shows that there is a tandem effect in operation because the use of both rules rely on the same underlying preferences in society. There is potential for the two rules to achieve the same results, and doubt over whether the SMS rule is an independent control over CBA. Instead, the SMS rule may simply operate as a nagging mechanism for issues of particular interest. Its use can be seen as a signal to switch to a more intensive examination of costs and benefits, and justified in this format because the benefits of more accurate decisions outweigh the costs of operating the SMS rule. The application of the SMS rule will vary according to the justification for its use.

Suggested Citation

  • Rolfe, John, 1995. "Ulysses Revisited - A Closer Look At The Safe Minimum Standard Rule," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 39(1), pages 1-16, April.
    • Handle: RePEc:ags:ajaeau:22860
    DOI: 10.22004/ag.econ.22860
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    References listed on IDEAS

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    1. Richard C. Ready & Richard C. Bishop, 1991. "Endangered Species and the Safe Minimum Standard," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 309-312.
    2. Hoehn, John P & Randall, Alan, 1989. "Too Many Proposals Pass the Benefit Cost Test," American Economic Review, American Economic Association, vol. 79(3), pages 544-551, June.
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    7. Richard C. Bishop, 1978. "Endangered Species and Uncertainty: The Economics of a Safe Minimum Standard," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(1), pages 10-18.
    8. V. Kerry Smith & John V. Krutilla, 1979. "Endangered Species, Irreversibilities, and Uncertainty: A Comment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(2), pages 371-375.
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    Cited by:

    1. Figge, Frank & Hahn, Tobias & Barkemeyer, Ralf, 2014. "The If, How and Where of assessing sustainable resource use," Ecological Economics, Elsevier, vol. 105(C), pages 274-283.
    2. Berrens, Robert P. & McKee, Michael & Farmer, Michael C., 1999. "Incorporating distributional considerations in the safe minimum standard approach: endangered species and local impacts," Ecological Economics, Elsevier, vol. 30(3), pages 461-474, September.
    3. Donaghy, Peter & Rolfe, John & Bennett, Jeffrey W., 2004. "Quasi-option values for enhanced information regarding genetically modified foods," 2004 Conference (48th), February 11-13, 2004, Melbourne, Australia 58403, Australian Agricultural and Resource Economics Society.
    4. Stephen Iles & Gary Johns, 2010. "An Economic Unravelling of the Precautionary Principle: The Queensland Wild Rivers Act 2005," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 17(2), pages 73-94.
    5. Bhattarai, Madhusudan & Hammig, Michael D., 1998. "Environmental Policy Analysis And Instruments For Biodiversity Conservation: A Review Of Recent Economic Literature," Working Papers 18810, Clemson University, Department of Agricultural and Applied Economics.
    6. Irmi Seidl & Clem Tisdell, 2001. "Neglected Features of the Safe Minimum Standard: Socio-economic and Institutional Dimensions," Review of Social Economy, Taylor & Francis Journals, vol. 59(4), pages 417-442.
    7. Crowards, Tom M., 1998. "Safe Minimum Standards: costs and opportunities," Ecological Economics, Elsevier, vol. 25(3), pages 303-314, June.

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