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Estimating the Resilience Value of Soil Biodiversity in Agriculture: A Stochastic Simulation Approach


  • Brady, Mark
  • Cong, RongGang


Characteristic of ecosystems is that different organisms can have similar functions and hence provide similar ecosystem services. Consequently functional diversity can maintain the rate of services despite environmental fluctuations. In this paper we present a method for estimating the resilience value of biodiversity. Central to a resilience perspective on biological conservation is consideration of uncertainty about the future. To do this we propose stochastic simulation as a practical approach for valuing resilience due to the ease of incorporating uncertain variables. We demonstrate the approach by developing a stochastic simulation model for valuing soil biodiversity in agriculture. Our results indicate that the long time frames involved in soil processes create a significant incentive to perpetuate unsustainable farming systems and hence there might be a need for policy intervention. However we also show that investing in soil biodiversity conservation can provide significant risk diversification benefits that are not accounted for in a deterministic evaluation. These benefits can be estimated through stochastic simulation.

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  • Brady, Mark & Cong, RongGang, 2011. "Estimating the Resilience Value of Soil Biodiversity in Agriculture: A Stochastic Simulation Approach," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114269, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae11:114269

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    References listed on IDEAS

    1. Jean-Paul Chavas, 2008. "On the economics of agricultural production ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(4), pages 365-380, December.
    2. Alan P. Ker & Keith Coble, 2003. "Modeling Conditional Yield Densities," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 291-304.
    3. Lynam, John K. & Herdt, Robert W., 1989. "Sense and sustainability: Sustainability as an objective in international agricultural research," Agricultural Economics, Blackwell, vol. 3(4), pages 381-398, December.
    4. Greiner, Romy & Patterson, Louisa & Miller, Owen, 2009. "Motivations, risk perceptions and adoption of conservation practices by farmers," Agricultural Systems, Elsevier, vol. 99(2-3), pages 86-104, February.
    5. Lien, Gudbrand & Brian Hardaker, J. & Flaten, Ola, 2007. "Risk and economic sustainability of crop farming systems," Agricultural Systems, Elsevier, vol. 94(2), pages 541-552, May.
    6. 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.
    7. Lynam, John K. & Herdt, Robert W., 1989. "Sense and Sustainability: Sustainability as an Objective in International Agricultural Research," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 3(4), December.
    8. Barrios, Edmundo, 2007. "Soil biota, ecosystem services and land productivity," Ecological Economics, Elsevier, vol. 64(2), pages 269-285, December.
    9. Hansen, J. W. & Jones, J. W., 1996. "A systems framework for characterizing farm sustainability," Agricultural Systems, Elsevier, vol. 51(2), pages 185-201, June.
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    1. Tobon Orozco, David & Molina Guerra, Carlos & Vargas Cano, John Harvey, 2016. "Extent of Expected Pigouvian Taxes and Permits for Environmental Services in a General Equilibrium Model with a natural capital constraint," BORRADORES DEPARTAMENTO DE ECONOM√ćA 015258, UNIVERSIDAD DE ANTIOQUIA - CIE.

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