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Is the Endangered Species Act Endangering Species?

Author

Listed:
  • John A. List
  • Michael Margolis
  • Daniel E. Osgood

Abstract

We develop theory and present a suite of theoretically consistent empirical measures to explore the extent to which market intervention inadvertently alters resource allocation in a sequentialmove principal/agent game. We showcase our approach empirically by exploring the extent to which the U.S. Endangered Species Act has altered land development patterns. We report evidence indicating significant acceleration of development directly after each of several events deemed likely to raise fears among owners of habitat land. Our preferred estimate suggests an overall acceleration of land development by roughly one year. We also find from complementary hedonic regression models that habitat parcels declined in value when the habitat map was published, which is consistent with our estimates of the degree of preemption. These results have clear implications for policymakers, who continue to discuss alternative regulatory frameworks for species preservation. More generally, our modeling strategies can be widely applied -- from any particular economic environment that has a sequential-move nature to the narrower case of the political economy of regulation.

Suggested Citation

  • John A. List & Michael Margolis & Daniel E. Osgood, 2006. "Is the Endangered Species Act Endangering Species?," NBER Working Papers 12777, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:12777
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    References listed on IDEAS

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    1. Robert Innes & Stephen Polasky & John Tschirhart, 1998. "Takings, Compensation and Endangered Species Protection on Private Lands," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 35-52, Summer.
    2. Daron Acemoglu & Joshua D. Angrist, 2001. "Consequences of Employment Protection? The Case of the Americans with Disabilities Act," Journal of Political Economy, University of Chicago Press, vol. 109(5), pages 915-957, October.
    3. Capozza, Dennis R. & Helsley, Robert W., 1990. "The stochastic city," Journal of Urban Economics, Elsevier, vol. 28(2), pages 187-203, September.
    4. Bar-Ilan, Avner & Strange, William C, 1996. "Investment Lags," American Economic Review, American Economic Association, vol. 86(3), pages 610-622, June.
    5. Lueck, Dean & Michael, Jeffrey A, 2003. "Preemptive Habitat Destruction under the Endangered Species Act," Journal of Law and Economics, University of Chicago Press, vol. 46(1), pages 27-60, April.
    6. Robert McDonald & Daniel Siegel, 1986. "The Value of Waiting to Invest," The Quarterly Journal of Economics, Oxford University Press, vol. 101(4), pages 707-727.
    7. Peltzman, Sam, 1975. "The Effects of Automobile Safety Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 677-725, August.
    8. James J. Heckman & Hidehiko Ichimura & Petra Todd, 1998. "Matching As An Econometric Evaluation Estimator," Review of Economic Studies, Oxford University Press, vol. 65(2), pages 261-294.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Lange, Andreas & Liu, Xiangping, 2014. "Land Development Restrictions and Preemptive Action - On the Benefits of Differentiated Regulation," Strategic Behavior and the Environment, now publishers, vol. 4(4), pages 393-414, December.
    2. repec:oup:renvpo:v:12:y:2018:i:1:p:69-91. is not listed on IDEAS
    3. Robalino, Juan & Villalobos-Fiatt, Laura, 2010. "Conservation Policies and Labor Markets: Unraveling the Effects of National Parks on Local Wages in Costa Rica," Discussion Papers dp-10-02-efd, Resources For the Future.
    4. repec:eee:eneeco:v:66:y:2017:i:c:p:320-327 is not listed on IDEAS
    5. Melina Kourantidou & Brooks A. Kaiser, 2017. "Research Agendas for Profitable Invasive Species," Working Papers 1/17, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.
    6. Di Maria, Corrado & Smulders, Sjak & van der Werf, Edwin, 2012. "Absolute abundance and relative scarcity: Environmental policy with implementation lags," Ecological Economics, Elsevier, vol. 74(C), pages 104-119.
    7. Langpap, Christian & Kerkvliet, Joe, 2012. "Endangered species conservation on private land: Assessing the effectiveness of habitat conservation plans," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 1-15.
    8. Nelson, Erik J. & Withey, John C. & Pennington, Derric & Lawler, Joshua J., 2017. "Identifying the impacts of critical habitat designation on land cover change," Resource and Energy Economics, Elsevier, vol. 47(C), pages 89-125.
    9. Robert Innes & George Frisvold, 2009. "The Economics of Endangered Species," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 485-512, September.
    10. Walls, Margaret & Riddle, Anne, 2012. "Biodiversity, Ecosystem Services, and Land Use: Comparing Three Federal Policies," Discussion Papers dp-12-08, Resources For the Future.
    11. Grijalva, Therese & Berrens, Robert P. & Shaw, W. Douglass, 2011. "Species preservation versus development: An experimental investigation under uncertainty," Ecological Economics, Elsevier, vol. 70(5), pages 995-1005, March.
    12. Tajibaeva, Liaila & Haight, Robert & Stephen, Polasky, 2014. "Welfare and Biodiversity Tradeoffs in Urban Open Space Protection," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170602, Agricultural and Applied Economics Association.
    13. David Sunding, 2014. "Conserving Endangered Species through Regulation of Urban Development: The Case of California Vernal Pools," Land Economics, University of Wisconsin Press, vol. 90(2), pages 290-305.
    14. Matias Iaryczower & Gabriel Katz, 2016. "What does IT Take for Congress to Enact Good Policies? an Analysis of Roll Call Voting in the US Congress," Economics and Politics, Wiley Blackwell, vol. 28(1), pages 79-104, March.

    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade

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