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The Economic Value of Biodiversity Preservation

Author

Listed:
  • Elettra Agliardi

    (University of Bologna)

  • Rossella Agliardi

    (University of Bologna)

  • Willem Spanjers

    (Kingston University)

Abstract

We study the decision to preserve diverse species when the value of biodiversity is uncertain, or even affected by ambiguity. Optimal decisions are derived both from the perspective of the producer/investor and the policy regulator (ecosystem planner). We find that while calculated risk creates a scope for biodiversity preservation, the presence of ambiguity aversion reduces it, thus accelerating the extinction of species with lower value. Our results suggest that effective conservation strategies would involve a reduction of ambiguity aversion by creating a stable and transparent policy environment. Furthermore, they may involve a two tier strategy, with one tier addressing output targets and the other conservation targets.

Suggested Citation

  • Elettra Agliardi & Rossella Agliardi & Willem Spanjers, 2024. "The Economic Value of Biodiversity Preservation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(6), pages 1593-1610, June.
    • Handle: RePEc:kap:enreec:v:87:y:2024:i:6:d:10.1007_s10640-024-00855-0
    DOI: 10.1007/s10640-024-00855-0
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    References listed on IDEAS

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