Economic Benefits of Rare and Endangered Species

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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

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Questions

• 1- What kinds of economic costs and benefits are
  provided by Threatened and Endangered (TE)
  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)?

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Measuring Costs and Benefits of TE Species

• Used Willingness to Pay (WTP) to determine costs
  and benefits (value) of TE species.
• Use Value
• Option Value
• Existence Value
• Bequest Value
• Total Economic Value
• (Randall and Stoll, 1983)

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Sources of Data

• 20 mail survey studies of WTP for TE species
• Used the mean WTP rather than the median WTP
• Dollars evaluated at a 1993 level
• Used a meta-analysis

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Method of Analysis

• Contingent Valuation Method (CVM)
• The creation of a hypothetical market
• Included description of species and necessary
  habitat
• Form and frequency of payment to maintain
  populations
• What is a respondents WTP?
• This method has been upheld as valid by the US
  District Court of Appeals

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Examples of WTPValue Per Species Per Household
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Some Results

• WTP is sensitive to the size of the population
  change of the TE 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

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ESA Implications

• CVM can provide Total Economic Value for TE
  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

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CBA in the ESA

• The CBA can be important but shouldnt be a sole
  determining factor
• A CBA does not include
• Equity
• Fairness
• Should value entire ecosystem, not individual
  species (habitat valuation)

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Questions?