Valuing Biodiversity from an Economic Perspective: A Unified Economic, Ecological and Genetic Approach

We develop a conceptual framework for valuing bioversity from an economic perspective. We consider bioversity important because of a number of characteristics or services that it provided of enhances. We attribute bioversity loss to economic activities related to decisions of private optimizing agents that ignore useful characteristics or services associated ecosystems. Using a unified model of economic management of an ecosystem under ecological and genetic constrains, we compare the optimal value of the social optimization problem where positive externalities associated with bioversity are internalized, to that of a private optimization problem. We obtain an endogenous measure of the bioversity value and relate this measure to ecologically/biologically oriented bioversity metrics (special richness, Shannon or Simpson indices) that correspond to the equilibrium diversities of the social and private optimization problems.