Stochastic Dominance, Entropy and Biodiversity Management

Catherine M. Chambers, Paul E. Chambers, John R. Crooker () and John C. Whitehead ()

No 08-08, Working Papers from Department of Economics, Appalachian State University

Abstract: In this paper we develop a model of population dynamics using the Shannon entropy index, a measure of diversity that allows for global and specific population shocks. We model the effects of increasing the number of parcels on biodiversity, varying the number of spatially diverse parcels to capture risk diversification. We discuss the concepts of stochastic dominance as a means of project selection, in order to model biodiversity returns and risks. Using a Monte Carlo simulation we find that stochastic dominance may be a useful theoretical construct for project selections but it is unable to rank every case. Key Words: Stochastic Dominance, Entropy, Biodiversity Management

JEL-codes: Q24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr and nep-env
Date: Written 2008
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Related works:
Working Paper: Stochastic Dominance, Entropy and Biodiversity Management (2008)
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