Listing and Delisting Thresholds Under the Endangered Species Act

22 Pages Posted: 16 Apr 2020

See all articles by Charles Sims

Charles Sims

University of Tennessee, Chattanooga

David Finnoff

University of Wyoming

Alan Hastings

University of California

Jacob Hochard

East Carolina University

Date Written: April 2017

Abstract

We consider the case where a species provides a flow of economic benefits, is at risk of extinction, and is being considered for addition to the Endangered Species List. Listing a species as endangered is costly but increases the flow of social benefits and reduces the likelihood of extinction. If the species recovers sufficiently, additional costs can be incurred to subsequently delist the species. By treating listing and delisting as a pair of linked investment options, we provide an alternative to current practice for listing and delisting decisions that maximizes the return from public conservation investments. Under this alternative framework, we show that economic considerations may actually afford greater protection for at‐risk species if these decisions are initiated early. However, biological sources of uncertainty may cause those species most in need of protection to be passed over in favor of more stable species that represent a “sure bet” for species preservation.

Keywords: Endangered species, compound option, optimal switching, uncertainty, irreversibility

Suggested Citation

Sims, Charles and Finnoff, David and Hastings, Alan and Hochard, Jacob, Listing and Delisting Thresholds Under the Endangered Species Act (April 2017). American Journal of Agricultural Economics, Vol. 99, Issue 3, pp. 549-570, 2017, Available at SSRN: https://ssrn.com/abstract=3577041 or http://dx.doi.org/10.1093/ajae/aaw094

Charles Sims (Contact Author)

University of Tennessee, Chattanooga

Department of Philosophy & Religion (#2753)
Chattanooga, TN 37403-2598
United States

David Finnoff

University of Wyoming ( email )

1000 E University Ave
Laramie, WY 82071
United States

Alan Hastings

University of California

540 Alumni Ln
Davis, CA 95616
United States

Jacob Hochard

East Carolina University

Greenville, NC 27858
United States

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