ABSTRACT
This paper explores the uses of economic theory in understanding what many noneconomists regard as the major environmental problem of our time—the mass extinction of plant and animal species that is expected in the years ahead. Among economists it is John Krutilla who recognized the problem, along with the closely related issue of wilderness preservation, and who engaged the interest and talents of the profession in addressing it. His seminal work, “Conservation Reconsidered,” which appeared in the American Economic Review now more than twenty years ago (Krutilla, 1967; reprinted in the appendix in this volume), not only drew our attention to the problem but first showed how concepts of economic theory could help explain it and even offer solutions. This brilliant and profound work marked the beginning of a research program, originally at Resources for the Future (RFF)—the Natural Environments Program—and now represented by a variety of efforts there and elsewhere. It was my privilege in 1975, about halfway through the RFF program, to participate with him in a summing up of what might be regarded as the first phase of the program (Krutilla and Fisher, 1975). In the present paper, I offer two models, drawing on more recent work by myself and others, to describe key aspects of the problem of species extinction: habitat loss and overexploitation. 1
