Abstract

This paper estimates the production costs of biological diversity on Swedish permanent grasslands. A simple model is introduced where biodiversity on pastures is produced using grazing animals. On the pastures, the grazing animals create a sufficient grazing pressure leading to an environment that suits many rare and red-listed species. Two types of pastures are investigated: semi-natural and cultivated. Biological diversity produced on a pasture is estimated by combining a biodiversity indicator, which measures the quality of the land, with the size of the pasture. Two areas in different parts of Sweden are investigated. Box-Cox transformations are used in the empirical analysis and the results indicate that the biodiversity production costs differ between the regions. The major contribution of this paper is that it develops and tests a method of estimating biodiversity productions costs on permanent pastures when biodiversity quality differs between pastures. If the method were to be used with cost estimates that are both more thoroughly retrieved and cover additional production areas, cost functions that could be used in applied policy work should be retrievable

Keywords

biodiversity; production cost; pasture; public good

Published in

Working Paper Series / Swedish University of Agricultural Sciences, Department of Economics
2005, number: 2005:03
Publisher: Institutionen för Ekonomi

SLU Authors

• Nilsson, Fredrik

  • Department of Economics, Swedish University of Agricultural Sciences
    

UKÄ Subject classification

Economics and Business
Social Sciences


Permanent link to this page (URI)

https://res.slu.se/id/publ/10593