Demand-side factors in optimal land conservation choice

Amy W. Ando, Payal Shah

Research output: Contribution to journalArticlepeer-review


The dominant paradigm of conservation-reserve planning in economics is to optimize the provision of physical conservation benefits given a budget constraint, implicitly assuming the value of biodiversity and ecosystem function is not affected by human proximity to that natural capital. There is evidence, however, that human willingness to pay (WTP) for conservation declines with distance-a phenomenon we call "spatial value decay". This paper begins a new strand of the conservation planning literature that takes demand-side factors - location of people in the landscape, the degree to which WTP for conservation depends on proximity - into account. We use theoretical models of linear abstract landscapes to explore the impact of demand-side factors on two facets of conservation choices: siting of a single reserve when conservation potential is greatest near a critical site, and siting of multiple reserves when fragmentation reduces physical conservation services produced. Our results show how planners should sometimes employ increased fragmentation to capture value when people's preferences are not very highly localized, and how optimal policy balances proximity to the ecologically critical site with proximity to people. In some scenarios, the payoff to using a reserve design approach that considers demand-side factors is large, but we find that spatial value decay reduces the benefits that can be gained from any conservation-planning approach.

Original languageEnglish (US)
Pages (from-to)203-221
Number of pages19
JournalResource and Energy Economics
Issue number2
StatePublished - Apr 2010


  • Conservation
  • Demand-side
  • Habitat
  • Optimal reserve-site selection
  • Spatial
  • Species

ASJC Scopus subject areas

  • Economics and Econometrics


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