Abstract
Linked general equilibrium economic and ecological models are connected through agricultural runoff and the fisheries. They are applied to a North Carolina estuary in which agricultural runoff alters phytoplankton densities and the resulting hypoxia leads to diminished fisheries. The effects of hypoxia on multiple species across space are analyzed and the joint economic and ecosystem wide response to a policy of reduced runoff is quantified. The approach provides an assessment of changes in ecological welfare (in terms of species populations) and economic welfare (in terms of equivalent variations) following reductions in runoff.
Highlights
Much of economic modeling involves optimizing behavior by agents who interact in institutions with other optimizing agents to shape equilibrium outcomes
Economists postulate that consumers and producers are motivated by utility and profit, and they respond to incentives in the form of prices that are generated by their individual choices within market institutions
In a fashion similar to the ecosystem modeling, the economic specification is based on a chosen benchmark year, and the data were used in calibrations to estimate parameters
Summary
Much of economic modeling involves optimizing behavior by agents who interact in institutions with other optimizing agents to shape equilibrium outcomes. In this paper we take as given that integrating economics and ecology for better policy making is appropriate and desirable [3,4,5,6] To this end, we draw upon the numerous similarities between economies and ecosystems to construct linked general equilibrium models of both systems. While there are numerous methods of approaching the problem, the most common method uses individual optimization problems of firms and consumers to derive demand and supply functions These functions describe how these agents react to prices and perturbations in other variables, and they are used to construct the equilibrium conditions of the model. If the numbers of individuals cease to change, a steady state is said to be attained
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
