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Valuing biodiversity from an economic perspective : a unified economic, ecological and genetic approach

  • Brock,W.
  • Xepapadeas,A.

    (University of Wisconsin-Madison, Social Systems Research Institute)

We develop a conceptual framework for valuing biodiversity from an economic perspective. We consider biodiversity important because of a number of characteristics or services that it provides or enhances. We argue for a dynamic economic welfare measure of biodiversity that complements the existing literature on benefit-cost approaches and genetic distance/phylogenic tree approaches, which to date have been more static. Using a unified model of optimal economic management of an ecosystem under ecological and genetic constraints, we identify gains realized by management policies leading to a more diverse system, using the Bellman state valuation function of the problem. We show that a more diverse system could attain a higher value even though the genetic distance of the species in the more diverse system could be almost zero. We relate this endogenous measure of the biodiversity value to ecologically/biologically oriented biodiversity metrics (species richness, Shannon or Simpson indices).

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File URL: http://www.ssc.wisc.edu/econ/archive/wp2001-17.pdf
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Paper provided by Wisconsin Madison - Social Systems in its series Working papers with number 17.

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Date of creation: 2001
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Handle: RePEc:att:wimass:200117
Contact details of provider: Postal: UNIVERSITY OF WISCONSIN MADISON, SOCIAL SYSTEMS RESEARCH INSTITUTE(S.S.R.I.), MADISON WISCONSIN 53706 U.S.A.

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  1. Weitzman, Martin L, 1993. "What to Preserve? An Application of Diversity Theory to Crane Conservation?," The Quarterly Journal of Economics, MIT Press, vol. 108(1), pages 157-83, February.
  2. Hurley, Terrance M. & Secchi, Silvia & Babcock, Bruce A. & Hellmich, Richard L., 2002. "Managing the Risk of European Corn Borer Resistance to Bt Corn," Staff General Research Papers 10294, Iowa State University, Department of Economics.
  3. Heal, G., 1999. "Biodiversity as a Commodity," Papers 99-7, Columbia - Graduate School of Business.
  4. Martin L. Weitzman, 1998. "The Noah's Ark Problem," Econometrica, Econometric Society, vol. 66(6), pages 1279-1298, November.
  5. Stephen Polasky & Andrew Solow & James Broadus, 1993. "Searching for uncertain benefits and the conservation of biological diversity," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 3(2), pages 171-181, April.
  6. Andrew Metrick & Martin L. Weitzman, 1998. "Conflicts and Choices in Biodiversity Preservation," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 21-34, Summer.
  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. Dasgupta, Partha & M Ler, Karl-G Ran, 2000. "Net national product, wealth, and social well-being," Environment and Development Economics, Cambridge University Press, vol. 5(01), pages 69-93, February.
  9. Brock,W. & Xepapadeas,A., 2000. "Optimal ecosystem management when species compete for limiting resources," Working papers 27, Wisconsin Madison - Social Systems.
  10. Amy Craft & R. Simpson, 2001. "The Value of Biodiversity in Pharmaceutical Research with Differentiated Products," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 18(1), pages 1-17, January.
  11. Solow Andrew & Polasky Stephen & Broadus James, 1993. "On the Measurement of Biological Diversity," Journal of Environmental Economics and Management, Elsevier, vol. 24(1), pages 60-68, January.
  12. Gardner M. Brown & Jason F. Shogren, 1998. "Economics of the Endangered Species Act," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 3-20, Summer.
  13. Terrance M. Hurley & Silvia Secchi & Bruce A. Babcock, 1999. "Managing the Risk of European Corn Borer Resistance to Transgenic Corn: An Assessment of Refuge Recommendations," Center for Agricultural and Rural Development (CARD) Publications 99-sr88, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  14. Polasky Stephen & Solow Andrew R., 1995. "On the Value of a Collection of Species," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 298-303, November.
  15. Bernhard, Pierre, 2002. "Survey Of Linear Quadratic Robust Control," Macroeconomic Dynamics, Cambridge University Press, vol. 6(01), pages 19-39, February.
  16. Weitzman, M.L., 1991. "On Diversity," Harvard Institute of Economic Research Working Papers 1553, Harvard - Institute of Economic Research.
  17. Weitzman, Martin L., 2000. "Economic Profitability Versus Ecological Entropy," Scholarly Articles 3693703, Harvard University Department of Economics.
  18. Montgomery, Claire A. & Pollak, Robert A. & Freemark, Kathryn & White, Denis, 1999. "Pricing Biodiversity," Journal of Environmental Economics and Management, Elsevier, vol. 38(1), pages 1-19, July.
  19. Chuan-Zhong Li & Karl-Gustaf Löfgren & Martin Weitzman, 2001. "Harvesting versus Biodiversity: An Occam's Razor Version," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 18(4), pages 355-366, April.
  20. Klaus Nehring & Clemens Puppe, 2002. "A Theory of Diversity," Econometrica, Econometric Society, vol. 70(3), pages 1155-1198, May.
  21. repec:cup:macdyn:v:6:y:2002:i:1:p:19-39 is not listed on IDEAS
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