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): Lauren Goschke

Questions #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 species Used the mean WTP rather than the median WTP 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 habitat Form and frequency of payment to maintain populations 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 SpeciesLow ValueHigh ValueAverage Value Northern Spotted Owl $44 $95 $70 Salmon/ Steelhead $31 $88 $63 Grey Whale $17 $33 $26 Bighorn Sheep $12 $30 $21

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)

Questions?