What is the optimal level of nature conservation? Although Samuelson’s theory of public goods is deep-rooted and also empirical and conceptual analyses of different aspects of environmental protection are abundant, studies that estimate both marginal benefits and costs of environmental protection are lacking. This study first estimates the marginal costs and benefits of protecting endangered habitat in Finland. The constructed supply and demand of environmental protection are then combined so that different policy alternatives can be assessed. Both cost- and benefit analyses use direct preference elicitation methods. Marginal costs and benefits are estimable and plausible, and their combination strikingly resembles a textbook example of supply and demand. The estimated “optimal” level of conservation is identified within the sample.
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