Table of Contents

Econometrics Informing Natural Resources Management

Econometrics Informing Natural Resources Management

Selected Empirical Analyses

New Horizons in Environmental Economics series

Edited by Phoebe Koundouri

This fascinating book outlines the fundamental principles and difficulties that characterise the challenging task of using econometrics to inform natural resource management policies, and illustrates them through a number of case studies from all over the world. The book offers a comprehensive overview of the broader picture of the state-of-the-art in econometrics as applied to environmental and natural resource management.

Chapter 10: The role of risk properties and farm risk aversion on crop diversity conservation

Salvatore Di Falco and Charles Perrings

Subjects: economics and finance, econometrics, environmental economics, environment, environmental economics, management natural resources


Salvatore Di Falco and Charles Perrings 1. INTRODUCTION The loss of biodiversity is causing major concern worldwide. Conservationists are, nowadays, less concerned with the extinction of a specific species but more with the overall loss of biological diversity. This is because the loss of genetic diversity implies a loss of the potential informational contributions embodied in species stock (Barrett, 1993). Biodiversity contributes also to the stability of ecosystems and a certain amount of biological diversity is vital to assure the capability of a system to work. In fact, ‘there is a threshold of Biodiversity below which most ecosystems cannot function under any given environmental condition’ (Perrings et al., 1995). Diversity is a fundamental component of the ability of the environment to support and sustain economic activities such as consumption and production. Environmental productivity plays a crucial role in short-term and long-term overall productivity. Following Pearce and Moran (1994), biodiversity can be described in terms of genes, species and ecosystems. This description corresponds to three fundamental and hierarchically related levels of biological organization: ● ● ● genetic diversity; species diversity; ecosystem diversity. Genetic diversity is the sum of genetic information that is contained in the genes of individual plants, animals and micro-organisms. Species diversity is considered to correspond to a population within which gene flow occurs under natural conditions. Ecosystem diversity relates to the diversity and variety of habitats, biotic communities and ecological processes in the biosphere, and can be described at different levels. At all 231 232 Estimation under uncertainty these...

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