Economic Benefits of Rare and Endangered Species

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Transcript Economic Benefits of Rare and Endangered Species

Economic Benefits of Rare
and Endangered Species
Loomis, J.B., White, D.S. "Economic Benefits
of Rare and Endangered Species: Summary
and Meta-Analysis." Ecological Economics
18(1996): 197-206.
Lauren Goschke
#1- What kinds of economic costs and benefits
are provided by Threatened and Endangered
(T&E) species?
#2- Can we calculate the importance of a
species through Willingness to Pay (WTP)?
#3- What is the most effective way of including
a cost-benefit analysis into the Endangered
Species Act (ESA)?
Measuring Costs and Benefits
of T&E Species
• Used Willingness to Pay (WTP) to determine
costs and benefits (value) of T&E species.
• Use Value
• Option Value
• Existence Value
• Bequest Value
Total Economic Value
(Randall and Stoll, 1983)
Sources of Data
• 20 mail survey studies of WTP for T&E
• Used the mean WTP rather than the median
• Dollars evaluated at a 1993 level
• Used a meta-analysis
Method of Analysis
• Contingent Valuation Method (CVM)
– The creation of a hypothetical market
• Included description of species and necessary
• Form and frequency of payment to maintain
• What is a respondent’s WTP?
• This method has been upheld as valid by the
US District Court of Appeals
Examples of WTP
Value Per Species Per Household
Low Value High Value
Average Value
Some Results
• WTP is sensitive to the size of the population
change of the T&E species
• WTP increases with increases in population,
but does so at a decreasing rate.
• WTP for marine mammals and birds is higher
than that for fish, land mammals, or birds
ESA Implications
• CVM can provide Total Economic Value
for T&E species
• Current costs and benefits based on
anthropocentric values, so CVM may
not account for all costs and benefits
• Safe Minimum Standard Approach
• Opportunity cost is low-problem is
distribution of costs
CBA in the ESA
• The CBA can be important but
shouldn’t be a sole determining factor
• A CBA does not include
– Equity
– Fairness
• Should value entire ecosystem, not
individual species (habitat valuation)