On the Scarcity Value of Ecosystem Services

38 Pages Posted: 24 Sep 2002

See all articles by Amitrajeet A. Batabyal

Amitrajeet A. Batabyal

Rochester Institute of Technology (RIT) - Department of Economics

James R. Kahn

Washington and Lee University - Environmental Studies Program and Dept. of Economics

Robert V. O'Neill

Oak Ridge National Laboratory - Environmental Sciences Division

Multiple version iconThere are 2 versions of this paper

Date Written: 2002

Abstract

In this exploratory paper, we first make a case for considering the scarcity value of ecosystem services in analyses of jointly determined ecological-economic systems. Next, we point out that insight into the scarcity value of an ecosystem service can be gained generally by examining the manner in which the state of an ecosystem responds to changes in environmental conditions. Following this, we specialize our discussion to the case of eutrophication in lakes. This leads us to pose and analyze a stochastic control problem of lake management in which ecological thresholds are salient. Finally, we show that this stochastic control theoretic framework can be used to obtain a numerical value that is closely related to the scarcity value of an ecosystem service provided by lakes.

Keywords: Ecosystem Service, Ecosystem Management, Lake, Scarcity Value, Stochastic Control

JEL Classification: Q20, D81

Suggested Citation

Batabyal, Amitrajeet A. and Kahn, James R. and O'Neill, Robert V., On the Scarcity Value of Ecosystem Services (2002). Available at SSRN: https://ssrn.com/abstract=332761 or http://dx.doi.org/10.2139/ssrn.332761

Amitrajeet A. Batabyal (Contact Author)

Rochester Institute of Technology (RIT) - Department of Economics ( email )

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James R. Kahn

Washington and Lee University - Environmental Studies Program and Dept. of Economics ( email )

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Robert V. O'Neill

Oak Ridge National Laboratory - Environmental Sciences Division ( email )

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