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What Drives Biodiversity? An Empirical Assessment of the Relation between Biodiversity and the Economy

Andreas Freytag, Christoph Vietze, Wolfgang Völkl


The environmental discussion has increasingly extended to the question of how to preserve biodiversity. As sensible regulation of biodiversity utilization needs politically set incentive schemes, it is required to discuss the monetary value of biodiversity. Consequently, the relation between economic incentives and biodiversity is in the focus of our paper. By using bird species as bio indicators we derive first empirical results. In sum, we conclude that indeed economic growth is harmful for biodiversity. This is at least in line with the first part of a biodiversity Kuznets curve. However, the existence of good institutions (especially a high quality of regulation) can in part prevent this effect. This can be cautiously interpreted as a hint that economic growth is not necessarily related to losses of biodiversity. With good governmental institutions, these losses may be prevented or mitigated.


economic growth; institutions; economic development; biodiversity conservation; multivariate cross country analysis

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