Research Spotlight: The economics of extinction

polar-bear-200.jpgWhat are the economic incentives for conserving species? Understanding the market forces that drive these environmental decisions – and may drive some species to extinction – is vital for the formulation of public policy toward natural resource management, says Santanu Roy, SMU professor of economics and 2007-08 Ford Research Fellow. That understanding can help governments determine regulatory controls such as quotas on harvesting marine life or on exploitation of forestry. While most current literature applies conventional economic theory, Roy has developed dynamic models that incorporate ecological features such as the effect of random environmental fluctuations on future population size and the potential “existence value” of a species even if it is not harvested. His results negate conventional wisdom about the limits of optimal species conservation and highlight the way harvesting affects resource stocks under “truly adverse” environmental shocks such as Hurricane Katrina – with important implications for policy intervention. Read more at Roy’s faculty Web site.