LUPI - Lupi GLANS v2 - glc.org · Frank Lupi Natural Resource and Environmental Economics Dept of...
Transcript of LUPI - Lupi GLANS v2 - glc.org · Frank Lupi Natural Resource and Environmental Economics Dept of...
Frank LupiNatural Resource and Environmental Economics
Dept of Agricultural, Food and Resource EconomicsDept of Fisheries and Wildlife
Recent research areas:
Demand and valuation of ecosystem services
Recreational fishing and beach use in Great Lakes
Conservation adoption
Incentive-based environmental policy
Agricultural Economics
Show importance?
Make decisions?
$11.5 billion in spending$1.5 billion in taxes117,000 jobs
What’s the purpose of Economic Info?
Types of Economic Measures
Economic Impacts/Contributions
Economic Value (Change in “Welfare”)
• Spending & how it contributes to economy“ripple effects,” tax revenues, jobs, etc.
• Economic value TO people/firms, above what they spendi.e., Benefits net of costs
Linking ANS to People and Economy
How do changes in ANS management link to changes in ecosystem services & link to changes in economy & people’s well‐being?
1. Requires knowledge of linkages
2. Focusses on changes
Change in ANS policy or mgmt. action
Changes in ecosystem services
Changes in economy
&people’s well‐being
How do changes in ANS management link to changes in ecosystem services & link to changes in economy & people’s well‐being?
1. Requires knowledge of linkages
2. Focusses on changes
Change in ANS policy or mgmt. action
Changes in ecosystem services
Changes in economy
&people’s well‐being
Linking ANS to People and Economy
To: Economy“Impacts”
• Money flows• Jobs, taxes
To: People“Value”
• Willingness to pay• Changes in profits
Purpose?
Shows importance
Make decisions• BCA• NRDA
How do changes in ANS management link to changes in ecosystem services & link to changes in economy & people’s well‐being?
1. Requires knowledge of linkages
2. Focusses on changes
Change in ANS policy or mgmt. action
Changes in ecosystem services
Changes in economy
&people’s well‐being
To: Economy“Impacts”
• Money flows• Jobs, taxes
To: People“Value”
• Willingness to pay• Changes in profits
Linking ANS to People and Economy
Expenditure
0 6
Pric
e
Quantity
$10
8
6
4
2
1 2 3 4 5 7 8 9
Why care about demand & supply?Gives us info on behaviors
Supply Function
Demand Function
Expenditure
0 6
Pric
e
Quantity
$10
8
6
4
2
1 2 3 4 5 7 8 9
Why care about demand & supply?Gives us info on behaviors
Supply Function
Demand Function
Supply Function with higher costs
Supply Function
Why else care about demand?Gives us info on benefits and costs
Expenditure
0 6
Pric
e
Quantity
$10
8
6
4
2
1 2 3 4 5 7 8 9
ConsumersBenefit
Demand Function
Why else care about supply?Gives us info on benefits and costs
0 6
Pric
e
Quantity
$10
8
6
4
2
1 2 3 4 5 7 8 9
Demand Function
Supply Function
Producer costs
Profits
ConsumersBenefit
Why care about demand & supply?Gives us info on behaviors
0 6
Pric
e
Quantity
$10
8
6
4
2
1 2 3 4 5 7 8 9
Demand Function
Supply FunctionWelfare measure
So with higher supply costs,welfare change is change in area
0 6
Pric
e
Quantity
$10
8
6
4
2
1 2 3 4 5 7 8 9
Demand Function
Supply Function
Supply Function with higher costs
Types of Economic Measures
Economic Impacts/Contributions
Economic Value (Change in “Welfare”)
• Spending & how it contributes to economy– Other peoples income, tax revenues, jobs, etc.
• Economic value TO people/firms, above what they spend– I.E., Benefits net of costs
Economic Impact
Net changes in new economic activity associated with an industry, event, or policy in a regional economy
Economic Benefit
A net increase in total social welfare. Economic benefits can be both market and nonmarket values.
Cost‐Benefit Analysis
Cost‐Effectiveness
An economic efficiency analysis that measures net changes in social welfare associated with an industry, event, or policy; includes both market and non‐market values and accounts for opportunity costs.
Determining the least cost way of achieving a goal; a necessary step for economic efficiency
Types of Economic Analyses
Adapted From: Watson et al., 2007. Determining Economic Contributions and Impacts: What is the difference and why do we care? JRAP 37(2):1‐15.
What has Economic Value?
• Nonmarket valuation – Tools to infer these values – Put on par with market costs
• Things that people are willing to sacrifice resources for have economic value.– Economic values not just for market goods
Market Values Values for goods and services exchanged in markets
Non‐market values
Values for non‐marketed goods and services (e.g., many natural resources and ecosystem services)
‐ Use values
Market or non‐market values related to use of a good or service (e.g., drinking water, water‐based recreation)
‐ Non‐use values
Values for non‐market goods & services unrelated to use (e.g., values for others use, for existence or for future generations)
Types of Economic Values
Economic valuation methodsMarket effects • Supply functions• Demand functions
Nonmarket values• Recreation demand• Hedonics (property values)• Avoided costs
– Mitigation/avoidance– Treatment/control/prevention
• Non‐use values– Referendum– Contingent valuation (stated preferences)
• Benefit Transfer– Not a valuation method per se– Need data & studies for
transferring
Collecting data & building model:
Can’t we just get this from literature?
• Not much $ goes into these original research studies
• Challenging to get the behavioral responses
• Reliability relies on replication in other areas/cases
Some past & current nonmarket valuation research
Spatially & temporally explicit economic demand models
– Great Lakes fishing linked to sea lamprey control
– Great Lakes & inland fishing (ongoing)
– Great Lakes beaches (ongoing)
Most trips
Fewest
Trips per site:
Forecasting biological and economic impacts of aquatic invasive species in Lake Michiganwith David Finnoff, Hongyan Zhang, Ed Rutherford, Doran Mason
GLFT, 2015‐2017
The good news…
• Some studies show:
– Economic benefits of preventing and controlling ANS can be substantial