Species preservation and biodiversity value: a real options approach
We evaluate biodiversity in a real options framework, when the resources in use are substitutable. We examine optimal conservation decisions given that a biodiversity loss is irreversible and that future use values are uncertain. While species substitutability is generally believed to reduce the value of diversity, we show that the flexibility associated with substitutability is a source of value.
(This abstract was borrowed from another version of this item.)
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.:
- Mason, Charles F., 2001. "Nonrenewable Resources with Switching Costs," Journal of Environmental Economics and Management, Elsevier, vol. 42(1), pages 65-81, July.
- Sedjo, Roger & Simpson, R. David, 1996. "Valuation of Biodiversity for Use in New Product Research in a Model of Sequential Search," Discussion Papers dp-96-27, Resources For the Future.
- Trigeorgis, Lenos, 1993. "The Nature of Option Interactions and the Valuation of Investments with Multiple Real Options," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 28(01), pages 1-20, March.
- Sedjo, Roger & Simpson, R. David, 1996. "Investments in Biodiversity Prospecting and Incentives for Conservation," Discussion Papers dp-96-14, Resources For the Future.
- Wesseler, Justus, 2000. "Temporal Uncertainty And Irreversibility: A Theoretical Framework For The Decision To Approve The Release Of Transgenic Crops," Proceedings:Transitions in Agbiotech: Economics of Strategy and Policy, June 24-25, 1999, Washington, D.C. 26010, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
- Swanson, Timothy M, 1994. "The Economics of Extinction Revisited and Revised: A Generalised Framework for the Analysis of the Problems of Endangered Species and Biodiversity Losses," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 800-821, Supplemen.
- Martin L. Weitzman, 1998. "The Noah's Ark Problem," Econometrica, Econometric Society, vol. 66(6), pages 1279-1298, November.
- McDonald, Robert L & Siegel, Daniel R, 1985. "Investment and the Valuation of Firms When There Is an Option to Shut Down," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(2), pages 331-349, June.
- Boyle, Phelim P., 1988. "A Lattice Framework for Option Pricing with Two State Variables," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 23(01), pages 1-12, March.
- Pindyck, Robert S., 1993.
"Investments of uncertain cost,"
Journal of Financial Economics,
Elsevier, vol. 34(1), pages 53-76, August.
- Simpson, R David & Sedjo, Roger A & Reid, John W, 1996. "Valuing Biodiversity for Use in Pharmaceutical Research," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 163-185, February.
- Oliver Fromm, 2000. "Ecological Structure and Functions of Biodiversity as Elements of Its Total Economic Value," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(3), pages 303-328, July.
- Amy Craft & R. Simpson, 2001. "The Value of Biodiversity in Pharmaceutical Research with Differentiated Products," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(1), pages 1-17, January.
- Kenneth J. Arrow & Anthony C. Fisher, 1974. "Environmental Preservation, Uncertainty, and Irreversibility," The Quarterly Journal of Economics, Oxford University Press, vol. 88(2), pages 312-319.
- Fisher, Anthony C. & Hanemann, W. Michael, 1987. "Quasi-option value: Some misconceptions dispelled," Journal of Environmental Economics and Management, Elsevier, vol. 14(2), pages 183-190, June.
- Martin L. Weitzman, 1993. "What to Preserve? An Application of Diversity Theory to Crane Conservation," The Quarterly Journal of Economics, Oxford University Press, vol. 108(1), pages 157-183.
- Triantis, Alexander J & Hodder, James E, 1990. " Valuing Flexibility as a Complex Option," Journal of Finance, American Finance Association, vol. 45(2), pages 549-565, June.
- Cox, John C. & Ross, Stephen A. & Rubinstein, Mark, 1979. "Option pricing: A simplified approach," Journal of Financial Economics, Elsevier, vol. 7(3), pages 229-263, September.
- Rausser, Gordon C. & Small, Arthur A., 2000.
"Valuing Research Leads: Bioprospecting and the Conservation of Genetic Resources,"
Berkeley Olin Program in Law & Economics, Working Paper Series
qt4t56m5b8, Berkeley Olin Program in Law & Economics.
- Gordon C. Rausser & Arthur A. Small, 2000. "Valuing Research Leads: Bioprospecting and the Conservation of Genetic Resources," Journal of Political Economy, University of Chicago Press, vol. 108(1), pages 173-206, February.
- Timo Goeschl & Timothy Swanson, 2002. "The Social Value of Biodiversity for R&D," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(4), pages 477-504, August.
- Brennan, Michael J & Schwartz, Eduardo S, 1985. "Evaluating Natural Resource Investments," The Journal of Business, University of Chicago Press, vol. 58(2), pages 135-157, April.
- Henry, Claude, 1974. "Investment Decisions Under Uncertainty: The "Irreversibility Effect."," American Economic Review, American Economic Association, vol. 64(6), pages 1006-1012, December.
When requesting a correction, please mention this item's handle: RePEc:eee:jeeman:v:48:y:2004:i:2:p:857-879. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.