IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Agriculture, Pesticides and the Ecosystem

Economists have a good understanding of intra-economic interdependence and a mature methodology of modeling it. Ecologists focus on the complex and sensitive interactions of species in ecosystems. This paper's objective is to suggest a new micro-foundation of ecosystem analysis based on economic methodology, to integrate the analysis of the ecosystem and the economy and focus on the interface of ecosystem- economy relations. Agriculture forms a major part of this interface. The basic assumption is that in the short period the individual organisms of all species behave as if they optimizes their costly offensive and defensive activities given the other organisms' activities (Nash-behavior). We consider an ecosystem with three species in a unidirectional food chain: buzzards feed on mice, mice feed on grain, and grain feeds on solar energy, and there is a fourth species, in fact, the humans, who feed on grain, too. Humans intervene in the ecosystem in various ways. They can grow grain by using seed, farm labor, pesticides and possibly nature conservation measures to maintain the buzzard habitat. A short-run ecosystem equilibrium is characterized, and it is shown, in particular, how this equilibrium depends on farming activities. We then link this ecosystem model to a simple model of an agricultural economy. Both systems are required to settle for an equilibrium simultaneously. From the economic perspective the ecosystem turns out to induce positive and negative externalities related to agricultural production and in consumer 'green' preferences. The inefficiencies of the competitive economy are identified and some (limited) possibilities to restore efficiency through corrective taxes or subsidies are briefly discussed. We also outline how short-run equilibria are connected through ecosystem stock-flow relationships. Due to the complexity of the intertemporal analysis the resulting ecosystem dynamics cannot be characterized in general analytical terms. It is an item for future research to study the dynamics in numerical analysis to understand under which conditions the joint ecological and economic system is driven toward a (sustainable) steady state.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht in its series Volkswirtschaftliche Diskussionsbeiträge with number 97-01.

in new window

Length: 25 pages
Date of creation: Jul 2001
Handle: RePEc:sie:siegen:97-01
Contact details of provider: Postal:
Hölderlinstr. 3, D - 57068 Siegen

Phone: ++49 (0)271 740-3139
Fax: ++49 (0)271 740-2590
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. Thomas Crocker & John Tschirhart, 1992. "Ecosystems, externalities, and economies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(6), pages 551-567, November.
  2. Finnoff, David & Tschirhart, John, 2003. "Harvesting in an eight-species ecosystem," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 589-611, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:sie:siegen:97-01. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael Gail)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.