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Valuing Biodiversity from an Economic Perspective: AUnified Economic, Ecological and Genetic Approach

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  • William Brock

    () (University of Wisconsin, Department of Economics, USA)

  • Anastasios Xepapadeas

    () (Department of Economics, University of Crete, Greece)

Abstract

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).

Suggested Citation

  • William Brock & Anastasios Xepapadeas, "undated". "Valuing Biodiversity from an Economic Perspective: AUnified Economic, Ecological and Genetic Approach," Working Papers 0301, University of Crete, Department of Economics.
  • Handle: RePEc:crt:wpaper:0301
    as

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    References listed on IDEAS

    as
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