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Preserving Biodiversity: Ambiguity and Safety Rules

Author

Listed:
  • Giannis Vardas

    (Department of Economics, University of Crete)

  • Anastasios Xepapadeas

    () (Department of Economics, University of Crete)

Abstract

Safety rules are developed, for biodiversity preservation. These rules are designed to take into account the impact of uncertainty and worst case scenarios, which when combined with unregulated ecosystem management decisions, might produce extinction of species. The safety rules take the form of fixed land allocation and fixed harvesting rules under uncertainty. We explore how model uncertainty affects these safety rules relative to the classic risk aversion case and how a measure of precaution against worst case scenarios can be formulated.

Suggested Citation

  • Giannis Vardas & Anastasios Xepapadeas, 2006. "Preserving Biodiversity: Ambiguity and Safety Rules," Working Papers 0607, University of Crete, Department of Economics.
  • Handle: RePEc:crt:wpaper:0607
    as

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    File URL: http://economics.soc.uoc.gr/wpa/docs/VaRLSTP.pdf
    File Function: First version, 2006
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Biodiversity Preservation; Model Uncertainty; Safety Rules;

    JEL classification:

    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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