Opportunity costs of conservation in a biodiversity hotspot: the case of southern Bahia

Kenneth M. Chomitz, Keith Alger, Timothy S. Thomas, Heloisa Orlando and Paulo Vila Nova

Environment and Development Economics, 2005, vol. 10, issue 03, pages 293-312

Abstract: Biodiversity hotspot areas, which are characterized by concentrations of endemic species and severe anthropogenic loss of natural habitat, might be thought to present steep opportunity costs for maintaining forest cover against pressures of agricultural conversion. We examine this proposition for the southern part of the state of Bahia, a center of endemism within the Brazilian Atlantic Forest, which has less than 8 per cent of its original primary forest cover remaining. Using data from a survey of property values, we relate land price to land characteristics, including land cover, soil quality, slope, climate, and road proximity. We find median land values of R$725 hectare, or about US$400 hectare at recently prevailing exchange rates. Remaining land under forest has a market value 70 per cent below comparable cleared land.

Date: 2005
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