Environmental and Resource Economics

, Volume 18, Issue 4, pp 355–366 | Cite as

Harvesting versus Biodiversity: An Occam's Razor Version

  • Chuan-Zhong Li
  • Karl-Gustaf Löfgren
  • Martin L. Weitzman


The point of departure for this paper is the familiar prototype fisheriesmodel where a fictitious sole owner harvests a fish population to maximizepresent discounted profits. The paper answers analytically the followingquestion. ``What happens to a policy when the sole owner also valuesbiodiversity, as well as profits?'' It turns out that the size of the steady-state stock and the number of species preserved are both higher, whenspecies diversity is positively valued. This paper provides a sharpcharacterization of the optimal policy in terms of the usual economicparameters and an exogenously introduced willingness-to-pay function forspecies preservation.

biodiversity optimal policy parameters 


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Copyright information

© Kluwer Academic Publishers 2001

Authors and Affiliations

  • Chuan-Zhong Li
    • 1
  • Karl-Gustaf Löfgren
    • 2
  • Martin L. Weitzman
    • 3
  1. 1.Department of EconomicsUmeå UniversityUmeåSweden
  2. 2.Department of EconomicsUmeå UniversityUmeåSweden
  3. 3.Department of EconomicsHarvard UniversityCambridgeUSA

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