Ecosystems - Burden or Bounty?

31 Pages Posted: 22 Aug 2014

See all articles by Richard Damania

Richard Damania

World Bank; University of Adelaide - School of Economics

Pasquale L. Scandizzo

University of Rome

A.J Glauber

World Bank - Africa

Multiple version iconThere are 2 versions of this paper

Date Written: August 8, 2014


This paper presents a somewhat novel approach to explore the economic contribution of ecosystems. It develops linked models to capture connections between resource stocks and flows and the resulting micro and macroeconomic impacts. A bioeconomic model is developed that is imbedded into a computable general equilibrium (CGE) model. Incorporating imperfect regulation, the bioeconomic model characterizes optimal policies, while the CGE model explores the economy-wide consequences of possible changes to the ecosystem. The model is parameterized and calibrated to the case of the Serengeti ecosystem which is perhaps the most intensively researched biome with a relative abundance of data. This ecosystem is also undergoing rapid change from a host of factors related to developments within and around the protected area system. The analysis identifies the contribution of the ecosystem to the economy and finds that changes in tourism and bushmeat hunting have surprisingly diffuse economy-wide impacts, that are especially large in the rural sector. To guard against overstatement, ecosystem impacts are under-stated relative to other effects. The results suggest that linkages to the natural resource sector (backward and forward multipliers) are important and neglecting these may lead to biased estimates.

JEL Classification: Q57; Q59; Q20; Q29

Suggested Citation

Damania, Richard and Scandizzo, Pasquale Lucio and Glauber, A.J, Ecosystems - Burden or Bounty? (August 8, 2014). CEIS Working Paper No. 324, Available at SSRN: or

Richard Damania

World Bank ( email )

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University of Adelaide - School of Economics ( email )

Adelaide SA, 5005
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Pasquale Lucio Scandizzo (Contact Author)

University of Rome ( email )

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Rome, I-00133
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+3906/2040219 (Fax)

A.J Glauber

World Bank - Africa ( email )

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Washington, DC 20433
United States

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