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An incremental analysis of the value of expanding a wilderness area

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  • Jonathan Buttle
  • Daniel Rondeau

Abstract

. Forsyth (2000) concludes from an option value analysis that when considered together, Killarney Provincial Park and two adjacent parcels of land should be preserved in an expanded park. With a simple discrete difference approach, we assess the incremental value of the adjacent land and decompose the benefits of park expansion. We identify a change in the value of the option to log the current park as a new component of value not previously reported. Applying the method to Killarney suggests that logging may be the most efficient use of the adjacent land. We also provide corrections for some of Forsyth's numerical results. JEL Classification: D81, Q20. La valeur à la marge de l’agrandissement d’une aire protégée. Forsyth (2000) conclut d’une analyse de valeur d’option que le parc provincial Killarney et deux parcelles de forêt adjacentes devraient ensemble être préservées dans leur état naturel. Ici, les auteurs développent une méthodologie simple permettant de déterminer la valeur des terres adjacentes indépendamment du parc, et de décomposer numériquement la valeur du projet d'agrandissement. Un changement dans la valeur d’option de la ressource forestière est identifié comme nouvelle composante des coûts et bénéfices du projet d’expansion. Une application de la méthode à la situation de Killarney indique qu’il pourrait être avantageux d’exploiter les ressources forestières des terres adjacentes plutôt que de les ajouter au parc. Certains des résultats numériques obtenus par Forsyth sont corrigés.

Suggested Citation

  • Jonathan Buttle & Daniel Rondeau, 2004. "An incremental analysis of the value of expanding a wilderness area," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 37(1), pages 189-198, February.
    • Handle: RePEc:wly:canjec:v:37:y:2004:i:1:p:189-198
    DOI: 10.1111/j.0008-4085.2004.010_1.x
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    References listed on IDEAS

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    1. Margaret Forsyth, 2000. "On estimating the option value of preserving a wilderness area," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 33(2), pages 413-434, May.
    2. Conrad, Jon M., 2000. "Wilderness: options to preserve, extract, or develop," Resource and Energy Economics, Elsevier, vol. 22(3), pages 205-219, July.
    3. Kimberly Rollins & Will Wistowsky & Michael Jay, 1997. "Wilderness Canoeing in Ontario: Using Cumulative Results to Update Dichotomous Choice Contingent Valuation Offer Amounts," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 45(2), pages 178-178, July.
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    Cited by:

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    2. Charles Sims & David Finnoff, 2016. "Opposing Irreversibilities and Tipping Point Uncertainty," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(4), pages 985-1022.

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    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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