We develop a conceptual framework for valuing biodiversity from an economic perspective. We argue for a dynamic economic welfare measure of biodiversity that complements the literature on benefit-cost approaches and genetic distance/phylogenic tree approaches. Using a unified model of optimal economic management of an ecosystem under ecological and genetic constraints, we identify gains from management policies leading to a more diverse system, using the Bellman state valuation function of the problem. We show that a more diverse system could attain a higher value although the genetic distance of the species in the more diverse system could be almost zero.
Brock, William A. and Anastasios Xepapadeas.
2003."Valuing Biodiversity from an Economic Perspective: A Unified Economic, Ecological, and Genetic Approach."American Economic Review,
93(5): 1597-1614.DOI: 10.1257/000282803322655464