An ecological economic assessment of risk-reducing effects of species diversity in managed grasslands

Robert Finger and Nina Buchmann

Ecological Economics, 2015, vol. 110, issue C, 89-97

Abstract: Over the last decade, it has been shown in the ecology literature that species diversity increases yield stability in managed grasslands. Here, we develop and apply ecological economic and econometric frameworks to evaluate these potential risk-reducing effects of species diversity in terms of yields and their temporal stability from a farmer's perspective. Our empirical analysis is based on a rich panel dataset obtained from a diversity experiment covering in total 60 species and a period of 6years. We find empirical evidence for the risk-reducing effect of species diversity and the economic assessment reveals significant insurance values associated with diversity for a risk-averse decision maker. Thus, the economic value of diversity would be underestimated if not accounting for this property, and species diversity may serve as valuable ex-ante risk management strategy.

Keywords: Species diversity; Risk; Insurance value; Grassland; Yield; Stability (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S092180091500004X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:110:y:2015:i:c:p:89-97

DOI: 10.1016/j.ecolecon.2014.12.019

Access Statistics for this article

Ecological Economics is currently edited by C. J. Cleveland

More articles in Ecological Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().