The Value of Biodiversity

Any assessment of the value of biodiversity should begin with an account of why one needs to value it and the reasons market values would not be expected to suffice for the purpose. This article discusses this in the context of the ecosystem services that biodiversity supports, along with the market and government failures that encourage resource users to ignore many of the effects of biodiversity change. It then considers how the value people explicitly or implicitly attach to biodiversity differs with income, culture, institutions, and the structure of the economy. This article shows how values can be translated into prescriptions for economic policy, and then reviews the special problems that arise in valuing biodiversity change, together with the techniques that are available for coping with those problems.