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

Abstract

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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REFERENCES

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  3. Holling, C. S., D. W. Schindler, B. W. Walker and J. Roughgarden (1995), ‘Biodiversity in the Functioning of Ecosystems: An Ecological Synthesis’, in C. Perrings, ed., Biodiversity Loss — Economic and Ecological Issues. Cambridge: Cambridge University Press.Google Scholar
  4. Li, C. Z. and K. G. Löfgren (1998), ‘A Dynamic Model of Biodiversity Preservation: Theory and Applications’, Environment and Development Economics 3, 157–172.Google Scholar
  5. Spence, M. and D. Starrett (1975), ‘Most Rapid Approach Paths in Accumulation Problems’, International Economic Review 16, 388–403.Google Scholar

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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