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Transaction Costs Economics of Irreplaceability: ex ante and ex post Evaluation of Conservation Networks’ Vulnerability to Environmental Shocks

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Abstract

The theoretical concept, “asset specificity,” is applied to real data in the context of Danish nature conservation network planning in order to produce illustrative examples of an economic measure of the network’s vulnerability to exogenous shocks to the species composition. Three different measures of asset specificity are quantified from the shadow value of eliminating a key species from the individual grid cells. This represents a novel approach and a different interpretation of the term, as it is conventionally used as a qualitative indicator in the transaction cost economics literature. Apart from supplementing existing cost measures with an indicator of risk associated with investments in protected areas, this study demonstrates how the estimation and interpretation of various asset specificity measures for geographical areas may qualify policy makers’ choice of policy instrument in conservation planning. This differs from the more intuitive approach of basing policy instrument choice solely on the rarity of the species in a given area.

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Acknowledgments

The many atlas data are generated largely by voluntary collectors, and without their effort, this type of analysis could not be conducted. The work of Danish Ornitological Society- BirdLife Denmark (birds), H. Baagøe (bats), K. Fog (amphibians and reptiles), M. Grell (birds), S. Kaaber (large moths), O. Martin (click beetles), M. Stoltze (butterflies), E. Torp (hoverflies), P. Wind (orchids), and M. Holmen (crawling water beetles) is gratefully acknowledged. We thank Professor Carsten Rahbek for access to the species databases.

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Authors and Affiliations

  1. Statistical Department, Copenhagen University, Faculty of Life Sciences, Institute of Food and Resource Economics, Rolighedsvej 25, Frederiksberg, DK, 1958, Denmark

    Henrik Huusom

  2. Division of Economics, Policy and Planning, Copenhagen University, Rolighedsvej 23, Frederiksberg, DK, 1958, Denmark

    Niels Strange

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  1. Henrik Huusom
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  2. Niels Strange
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Correspondence to Niels Strange.

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Huusom, H., Strange, N. Transaction Costs Economics of Irreplaceability: ex ante and ex post Evaluation of Conservation Networks’ Vulnerability to Environmental Shocks. Environmental Management 41, 551–565 (2008). https://doi.org/10.1007/s00267-007-9061-7

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