It is customary to draw attention to the scarcity of hard information about the economic value of biodiversity. But for each of the valuation methods discussed above, there has been a smattering of apparently successful empirical application. Fisher and Hanemann (1984) have used ordinary market data to estimate the potential value of the plant breeding that recently resulted in the discovery of perennial grass related to corn (see Iltis, Chapter 10 of this book). Literally dozens of economists have used implicit pricing methods to estimate the values of various environmental amenities. Stoll and Johnson (1984) used the contingent valuation method (CVM) to estimate the existence values for whooping cranes. Bishop (in press) used CVM to estimate the existence values for Wisconsin’s bald eagles and striped shiners (a rather obscure freshwater fish). Bennett (1984) used CVM to estimate the existence value of a unique ecosystem that survives in a remote part of the coastline of southeastern Australia. Bishop (1980) has also completed some empirical analyses based on the SMS criterion. For several cases in the United States (the California condor, snail darter, and leopard lizard) and for mountain gorillas in low-income tropical Ruanda, he found the opportunity costs of preservation to be reasonably low. In such cases, preservation decisions are not difficult.
Clearly, the empirical evidence is spotty at this stage, but these examples serve to counter the impression that high-quality empirical work on the value of diversity is not feasible.
The mainstream economic approach has a built-in tendency to express the issues in terms of trade-offs. In that respect, it has much in common with the common law notion of balancing the interests. This makes the mainstream economic approach potentially helpful in the resolution of conflicts. Perhaps it also makes the economic approach anathema to those who would brook no compromise.
Important problems in making decisions concerning biodiversity are seldom of the all-or-none variety. It is easy to provide the mainstream economic answer to the question, What is the value of all the nonhuman biota on the planet Earth? Its value is infinite based on the following logic: elimination of all nonhuman biota would lead to the elimination of human life, and a life-loving human would not voluntarily accept any finite amount of compensation for having his or her own life terminated. Earth’s human population surely includes at least one such person. Thus, across the total population, the sum of WTA for elimination of all nonhuman biota is clearly infinite. Nonetheless, the question posed is not very useful. The meaningful questions concern the value lost by the disappearance of a chip of biodiversity here and a chunk there. For this smaller question, it is often possible to provide an economic answer that is useful and reasonably reliable.
The goal of the mainstream economic approach is to complete a particular form of utilitarian calculation. This calculation is expressed in money values and includes (in raw or modified form) the commercial values that are expressed in markets.