THE ENDANGERED SPECIES ACT AND ECONOMIC VALUES - A COMPARISON OF FINES AND CONTINGENT VALUATION STUDIES

Economic theory holds that the level of punishment set for a violation of a law reflects, or should reflect, the marginal social damage of t he violation. This paper considers the implications of this theory wit h respect to the Endangered Species Act of 1973 (ESA). In particular, we examine the punishment set forth in the ESA as an indicator of marg inal social damage. We compare the level of punishment, or fines, in t he ESA to other attempts at measuring the marginal social value of thr eatened and endangered species, namely contingent valuation method stu dies. The comparison indicates that fines in the ESA do not depict the marginal social damage incurred with each 'taking' of a threatened or endangered species. Further, the comparison shows that the fines are, if anything, too low. Possible modifications to the ESA should consid er a fine structure that reflects the degree, or level, of species end angerment. Proposed or existing endangered species legislation in othe r nations should perhaps also incorporate such a structure. (C) 1998 E lsevier Science B.V. All rights reserved.