Valuing Biodiversity for Use in Pharmaceutical Research

Posted: 2 May 2000

See all articles by R. David Simpson

R. David Simpson

Government of the United States of America - Environmental Protection Agency (EPA)

Roger A. Sedjo

Resources for the Future

John W. Reid

Resources for the Future

Abstract

"Biodiversity prospecting" has been touted as a mechanism for both discovering new pharmaceutical products and saving endangered ecosystems. It is unclear what values may arise from such activities, however. Evidence from transactions is incomplete and existing theoretical models are flawed. We calculate an upper bound on the value of the "marginal species." Even under favorable assumptions this bound is modest. Slightly modified assumptions lead to drastically lower estimates. We extend our findings to the value of the marginal hectare of habitat and find that the incentives for habitat conservation generated by private pharmaceutical research are also, at best, very modest.

JEL Classification: Q2

Suggested Citation

Simpson, R. David and Sedjo, Roger A. and Reid, John W., Valuing Biodiversity for Use in Pharmaceutical Research. JOURNAL OF POLITICAL ECONOMY 104, February 1996. Available at SSRN: https://ssrn.com/abstract=4948

R. David Simpson (Contact Author)

Government of the United States of America - Environmental Protection Agency (EPA) ( email )

Ariel Rios Building
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
United States

Roger A. Sedjo

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States

John W. Reid

Resources for the Future

1616 P Street, NW
Washington, DC 20036
United States

Register to save articles to
your library

Register

Paper statistics

Abstract Views
803
PlumX Metrics