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Option Value, Gallot's Inequality, And The Measurement Of Biological Diversity

Author

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  • Steven Polasky
  • Andrew R. Solow

    (Woods Hole Oceanographic Institution)

Abstract

To allocate scarce resources to the conservation of biological diversity in an effective way, it is necessary to measure diversity. One argument in favor of species conservation is that species have an option value arising from their potential future use (e.g., in curing a disease). We use a simple model that relates the genetic distance between species to a nonparametric lower bound on option value. This leads to a simple measure that can be used to compare different sets of species. The measure can be interpreted as the effective number of species in the set. An example is given illustrating the use of this measure in comparing different sets of glucosinolate-producing plants.

Suggested Citation

  • Steven Polasky & Andrew R. Solow, 1993. "Option Value, Gallot's Inequality, And The Measurement Of Biological Diversity," Boston College Working Papers in Economics 241, Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:241
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    Cited by:

    1. Martin L. Weitzman, 1998. "The Noah's Ark Problem," Econometrica, Econometric Society, vol. 66(6), pages 1279-1298, November.
    2. Courtois, Pierre & Figuières, Charles & Mulier, Chloe, 2019. "A Tale of Two Diversities," Ecological Economics, Elsevier, vol. 159(C), pages 133-147.
    3. Bartkowski, Bartosz & Lienhoop, Nele & Hansjürgens, Bernd, 2015. "Capturing the complexity of biodiversity: A critical review of economic valuation studies of biological diversity," Ecological Economics, Elsevier, vol. 113(C), pages 1-14.
    4. Gerber, Nicolas, 2011. "Biodiversity measures based on species-level dissimilarities: A methodology for assessment," Ecological Economics, Elsevier, vol. 70(12), pages 2275-2281.
    5. Okamura, Keisuke, 2020. "Affinity-based extension of non-extensive entropy and statistical mechanics," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 557(C).
    6. Stephen Polasky & Jeffrey D. Camm & Brian Garber-Yonts, 2001. "Selecting Biological Reserves Cost-Effectively: An Application to Terrestrial Vertebrate Conservation in Oregon," Land Economics, University of Wisconsin Press, vol. 77(1), pages 68-78.
    7. Simpson, R. David, 2002. "Definitions of Biodiversity and Measures of Its Value," Discussion Papers 10551, Resources for the Future.
    8. Perry, Neil & Shankar, Sriram, 2017. "The State-contingent Approach to the Noah's Ark Problem," Ecological Economics, Elsevier, vol. 134(C), pages 65-72.
    9. G. Andrew Karolyi & John Tobin‐de la Puente, 2023. "Biodiversity finance: A call for research into financing nature," Financial Management, Financial Management Association International, vol. 52(2), pages 231-251, June.
    10. Brei, Michael & Pérez-Barahona, Agustín & Strobl, Eric, 2016. "Environmental pollution and biodiversity: Light pollution and sea turtles in the Caribbean," Journal of Environmental Economics and Management, Elsevier, vol. 77(C), pages 95-116.
    11. Yoshida, Jun & Kono, Tatsuhito, 2022. "Cities and biodiversity: Spatial efficiency of land use," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 685-705.
    12. Martin L. Weitzman, 1993. "What to Preserve? An Application of Diversity Theory to Crane Conservation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(1), pages 157-183.
    13. Perry, Neil, 2010. "The ecological importance of species and the Noah's Ark problem," Ecological Economics, Elsevier, vol. 69(3), pages 478-485, January.
    14. Pavoine, Sandrine & Bonsall, Michael B., 2009. "Biological diversity: Distinct distributions can lead to the maximization of Rao’s quadratic entropy," Theoretical Population Biology, Elsevier, vol. 75(2), pages 153-163.
    15. Ricotta, Carlo & Szeidl, Laszlo, 2009. "Diversity partitioning of Rao’s quadratic entropy," Theoretical Population Biology, Elsevier, vol. 76(4), pages 299-302.
    16. Gerrit Ansmann & Tobias Bollenbach, 2021. "Building clone-consistent ecosystem models," PLOS Computational Biology, Public Library of Science, vol. 17(2), pages 1-25, February.
    17. Paul, Prosenjit & Kar, T.K., 2016. "Impacts of invasive species on the sustainable use of native exploited species," Ecological Modelling, Elsevier, vol. 340(C), pages 106-115.

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