I am a loyal follower of NPR’s Planet Money podcast. I’m also infinitely intrigued by efforts to use economics to value and manage natural resources. Hence, I was tickled to hear Planet Money personalities Jacob Goldstein and Adam Davidson debate the price of a dead pelican in a recent episode. The debate stemmed from this question: How much should BP be charged for pelicans killed in the Gulf oil spill?
The show launches with Goldstein at the Bronx Zoo, where a nature photographer concludes: A pelican is priceless. No amount of money will resurrect a dead pelican.
But Davidson quips: “If you’re saying a pelican is worth all the money in the world it has the same effect as saying: ‘Pelicans are free. Kill as many as you want.’”
His argument: If the U.S. were to give BP a bill saying: ‘Give us all the money in the world. Pay us infinite dollars.’ It would have the same effect as saying: ‘Here’s a bill for nothing. Don’t pay us anything.’
“So,” Davidson concludes, “sort of strangely, if you really love pelicans, one of the best things you can do, possibly, is to put a price on them. A specific price. A dollar and cents price.”
Seeing as creating a market for the protected migratory bird is illegal, the Planet Money boys had to get creative in putting a price on a pelican.
Here’s the list they came up with:
- Ask most people: They’ll tell you a pelican is priceless
- Take the price bird lovers spend rehabilitating an injured pelican: $500
- Use the price of renting a pelican in Hollywood: $1,500 a day for non-flying; $4,500 for flying
- Ask a different way: For example, one man extrapolated the value of a wild duck based on a survey of how much hunters said they would pay to take an extra one home. Answer: $30
- Equate it with the cost of restoring the population loss: In other words, one pelican is worth one pelican.
OK, your turn. Multiple choice (from the options above) or fill in the blank: How would you calculate the value of a pelican?