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  3. American Economic Review
  4. December 2003
  5. Valuing Biodiversity from an Economic Perspective: A Unified Economic, Ecological, and Genetic Approach

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

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Abstract

We develop a conceptual framework for valuing biodiversity from an economic perspective. We argue for a dynamic economic welfare measure of biodiversity that complements the literature on benefit-cost approaches and genetic distance/phylogenic tree approaches. Using a unified model of optimal economic management of an ecosystem under ecological and genetic constraints, we identify gains from 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 although the genetic distance of the species in the more diverse system could be almost zero.

Citation

Brock, William, A., and Anastasios Xepapadeas. 2003. "Valuing Biodiversity from an Economic Perspective: A Unified Economic, Ecological, and Genetic Approach." American Economic Review, 93 (5): 1597-1614. DOI: 10.1257/000282803322655464

JEL Classification

  • Q51 Valuation of Environmental Effects
  • Q57 Ecological Economics: Ecosystem Services; Biodiversity Conservation; Bioeconomics; Industrial Ecology