IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Returns from Hay Cultivation in Fertilized Low Diversity and Non-Fertilized High Diversity Grassland

  • Felix Schläpfer

    ()

  • Michael Tucker
  • Irmi Seidl
Registered author(s):

    Recent ecological experiments suggest that theinterannual stability of ecosystem productivitymay be determined by the diversity of organismspresent in the system. We investigate whethersuch effects of biotic diversity on ecosystemstability may translate into economic valuesand possibly into an economic argument for themaintenance of biodiversity in managedhabitats. Applying a stochastic model fromfinancial economics to long-term harvest datafrom a grassland ecosystem we examine thepotential “insurance” value of plant diversityon the stability of yields and economic returnsin a drought-sensitive agricultural setting.Putative insurance premiums priced as putoptions on revenues from hay yield were higherfor fertilized low-diversity grassland than forunfertilized species-rich glassland. From thisperspective the annual “insurance value”(differential insurance premiums required tolock in specific rates of returns) of diverseplant communities may amount to $3.50 to$6.00 per acre. The results suggest thatincreased costs of risk in species-poorfertilized grassland may affect the optimumlevel of fertilization making lower fertilizerinput and concomitantly higher plant communitydiversity more desirable. Copyright Kluwer Academic Publishers 2002

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://hdl.handle.net/10.1023/A:1014580317028
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

    Volume (Year): 21 (2002)
    Issue (Month): 1 (January)
    Pages: 89-100

    as
    in new window

    Handle: RePEc:kap:enreec:v:21:y:2002:i:1:p:89-100
    Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100263

    References listed on IDEAS
    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.:

    as in new window
    1. Swanson, Timothy & Goschl, Timo, 2000. "Property rights issues involving plant genetic resources: implications of ownership for economic efficiency," Ecological Economics, Elsevier, vol. 32(1), pages 75-92, January.
    2. Tucker, Michael, 1997. "Climate change and the insurance industry: the cost of increased risk and the impetus for action," Ecological Economics, Elsevier, vol. 22(2), pages 85-96, August.
    3. Nick Hanley & Clive Spash & Lorna Walker, 1994. "Problems in Valuing the Benefits of Biodiversity Protection," Working Papers Series 94/8, University of Stirling, Division of Economics.
    4. Black, Fischer & Scholes, Myron S, 1973. "The Pricing of Options and Corporate Liabilities," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 637-54, May-June.
    5. Andrew Metrick & Martin L. Weitzman, 1998. "Conflicts and Choices in Biodiversity Preservation," Harvard Institute of Economic Research Working Papers 1836, Harvard - Institute of Economic Research.
    6. Charles Perrings & David Stern, 2000. "Modelling Loss of Resilience in Agroecosystems: Rangelands in Botswana," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 16(2), pages 185-210, June.
    7. 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 163-85, February.
    8. Montgomery Claire A. & Brown Jr. , Gardner M. & Adams Darius M., 1994. "The Marginal Cost of Species Preservation: The Northern Spotted Owl," Journal of Environmental Economics and Management, Elsevier, vol. 26(2), pages 111-128, March.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:21:y:2002:i:1:p:89-100. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)

    or (Christopher F. Baum)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.