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Is the Endangered Species Act Endangering Species?

46 Pages Posted: 23 Dec 2006  

John A. List

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Michael Margolis

Escuela de Econonía, Universidad de Guanajuato

Daniel E. Osgood

University of Arizona - Department of Agricultural and Resource Economics

Date Written: December 2006

Abstract

We develop theory and present a suite of theoretically consistent empirical measures to explore the extent to which market intervention inadvertently alters resource allocation in a sequentialmove principal/agent game. We showcase our approach empirically by exploring the extent to which the U.S. Endangered Species Act has altered land development patterns. We report evidence indicating significant acceleration of development directly after each of several events deemed likely to raise fears among owners of habitat land. Our preferred estimate suggests an overall acceleration of land development by roughly one year. We also find from complementary hedonic regression models that habitat parcels declined in value when the habitat map was published, which is consistent with our estimates of the degree of preemption. These results have clear implications for policymakers, who continue to discuss alternative regulatory frameworks for species preservation. More generally, our modeling strategies can be widely applied -- from any particular economic environment that has a sequential-move nature to the narrower case of the political economy of regulation.

Suggested Citation

List, John A. and Margolis, Michael and Osgood, Daniel E., Is the Endangered Species Act Endangering Species? (December 2006). NBER Working Paper No. w12777. Available at SSRN: https://ssrn.com/abstract=953200

John A. List (Contact Author)

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Michael Margolis

Escuela de Econonía, Universidad de Guanajuato ( email )

Guanajuato
Mexico

HOME PAGE: http://economia.ugto.org/michael/

Daniel E. Osgood

University of Arizona - Department of Agricultural and Resource Economics ( email )

1110 E. North Campus Drive
Tucson, AZ 85721-0023
United States

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