Economic vs. Ecological Statistics

The type of statistics that ecologists and economists focus on and choose to ignore are contrary to each other. One focuses on total variety statistics and ignores total quantity statistics, while the other does the opposite. Economic statistics focus on total output and ignore amount of choices, while ecological statistics focus on biodiversity and ignore total amount of life. Both economic and ecological statistics give incomplete pictures because of what they are ignoring and could gain by putting more focus on the type of statistics the other discipline is capturing.


Ecological Statistics

Ecological statistics focus on biodiversity: total number of species and number of species in danger of extinction. Recently I have come across all sorts of articles that report statistics on the number of species that are in danger of extinction: 16,928 total species, 48% of primates (and 80% in Asia), 20% of livestock breeds, 12% of birds, 23% of mammals, and 30% of amphibians.

But, there is little focus on statistics that measure the total amount of life on Earth or the size of species populations. Net primary productivity measures the total amount of biomass created each year and is one way to measure the total amount of life on Earth. This measurement gets little attention, even though unlike biodiversity, it has been increasing as of late. Statistics on species populations are also hard to find, although the Census of Marine Life is collecting some figures and hopefully the Encyclopedia of Life will display population information for each species.

It is important to put more emphasis on NPP and species population statistics to change the focus of ecologists from just preserving habitats of endangered species to also managing habitats to promote additional life on Earth. While I am all for preserving biodiversity hotspots, I would also like to see actions such as fertilizing the oceans, greening the deserts, using electricity and reef balls to increase the growth of coral, and better management of water resources to increase NPP. To paraphrase the economic quote 'a rising tide lifts all boats', rising NPP lifts all species populations. Increasing species populations is a good thing even if they aren't on the verge of going extinct. Beyond managing wilderness lands, ecologists should also promote improving farming techniques and research that will increase crop yields to minimize the amount of farm land needed and reduce the need to turn additional forest land into cropland.

The current high rate of extinctions makes scientists believe we are in the 6th mass extinction of the planet. Capturing information about the total amount of life will let us determine whether this mass extinction is like a nuclear holocaust where both the total amount of life and the number of species decreases, or if the world is experiencing a 'McDonaldization of ecosystems' where ecosystem around the world are converging on the same species (driving many species extinct), but each individual ecosystem is healthy and the amount of life on Earth stays constant.


Economic Statistics

Economic statistics focus on total output statistics such as GDP. The goal is to try and increase GDP, allowing consumers to purchase more goods and services and raising the standard of living as measured by GDP per capita.

But, when it comes to statistics that measure the diversity of products available to consumers, I am unaware of any. I would like to see a statistic that measured how many different types of products the economy produced. How many types of TVs, refrigerators, cars, books, types of clothing, etc. are available to consumers? I would also like to see a regional metric that measured the amount of products available locally for consumers to choose from. How many restaurants are within a 5 mile radius? How many movies do the local video rental stores have to choose from? This metric would allow comparisons of product variety between different cities and between urban and rural areas.

It is important to collect statistics on the diversity of products because additional choice adds extra value to economies and extra utility to consumers. If two economies had identical GDPs, but one had more product variety, it would be richer. $100 is more valuable in an economy that has more options of how to spend it. Greater selection adds values in three ways: additional variety (ability to eat at a different restaurant for lunch every day), additional specificity (ability to find a computer that more closely meets your specific needs) and additional individuality (ability to find clothes that are different from what others have).

Amount of selection is particularly important with attention goods like movies, books and TV shows. With attention goods, you have a fixed amount of time to consume them (which makes time more valuable than money in the attention economy). The fixed amount of time make greater selection more valuable than additional goods (and raises questions of how to measure productivity in the digital age). This is the essence of the added value of the long tail. Put another way, a Netflix 3 DVD at a time subscription with a library of 100,000 movies is more valuable than a 4 DVD subscription with a 20,000 movie library.

Another way to reflect the value of extra purchase options would be to incorporate it into the GDP figure itself. An analysis by Christian Broda and David Weinstein estimates that US welfare is 3% higher due to increased purchase options from imported varieties. Real GDP could take into account greater purchase options if inflation captured this information. Currently this is not done, as pointed out in Misconceptions of the CPI:

By the same token, an increase in product variety is a benefit to consumers that also is not accounted for by any CPI. The Boskin commission pointed to the increased variety of restaurants as an example of a consumer benefit that does not enter into the calculation of the CPI. The introductions of new classes of products such as MP3 players or DVD players are additional examples.

While converting extra selection into additional value in GDP allows for easier comparisons of economies across countries and time periods, information is lost when converted into a single GDP metric. Being rich and living in a rural area with few consumption choices is not the same as being a bit poorer and living in an urban area with lots of choices. Living in 2008 with 200+ TV channels to choose from is not the same as being slightly richer in 1978 with only 5 TV channels to choose from. For that reason, I believe statistics on the diversity of products available should be reported separately and accompany GDP.


Conclusion

If economic statistics had the same focus as ecological statistics we would worry about how many brands of jeans were available to purchase but ignore how many jeans consumers could actually buy. If ecological statistics had the same focus as economic statistics we would worry about trying to increase the population counts of species on Hawaii but ignore the 271 species that went extinct.

To get a more accurate picture of how the economy and the natural environment are functioning, statistics on both total output/amount of life and amount of choices/biodiversity are needed. While economic statistics focus on total output and ecological statistics focus on biodiversity, each discipline could gain from using some of the others techniques.