The economic implications of a multiple species approach to bioeconomic modelling : a thesis presented in partial fulfilment of the requirements for the degree of Master of Applied Economics at Massey University, Palmerston North, New Zealand
Human activity frequently leads to the endangerment or extinction of other species. While ecologists study the biological facets of species loss, economics, as the science of understanding people's behaviour, has been charged with investigating the incentives underlying the actions people take that lead to this loss. One approach economists have taken to gain this understanding is to develop models of endangered species that include both economic and biological components, known as bioeconomic models. While ecologists frequently note the importance of modelling entire ecosystems rather than single species, most bioeconomic models in the current literature focus only on a single species. This thesis addresses the economic significance of this assumption through the development of a series of multiple species models and demonstrates, using African Wildlife as an example, the importance of interrelationships and economic values to the survival of endangered species. From these models one can infer the conditions under which a single species model may be appropriate, at least in general terms. If species are independent, and either the opportunity cost of capital or the value of habitat is very low relative to the value of the species in question, then a single species model may yield results similar to that of a multiple species model. In contrast, if species are independent and these additional conditions are not met, a single species model may significantly underestimate both optimal stock levels and land allocation. However, species do not live independently; they interact with species with which they share habitat and, when species interact, the potential for misapplication of the single species framework is even greater. When species compete, the single species framework consistently produces higher stock levels than the multiple species framework, the greater the level of competition the greater the difference. In a predator-prey relationship, the relative values of predator and prey are critical to determining the outcome of the multiple species model. It is demonstrated that the inclusion of at least all economically valuable species in an ecosystem is important when constructing bioeconomic models. Using single species models where multiple species are economically significant could lead to misleading results and ultimately to incorrect policy decisions.