Coastal Services Center

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Introduction to Economics for MPA Managers

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Plan A or Plan B? A cost benefit analysis can help you determine the best plan of action.

How Can Economic Tools Help Me?

Any time there is more than one way to approach a problem such declining fish populations, the alternatives must be valued and evaluated to make a choice. This sort of analysis lies at the very heart of economics. For this reason, some standard economic tools can be very useful in managing MPAs. Additionally, economic analysis may be an effective tool to use with commercially minded stakeholders who think in terms of economics.

One of the best-known economic tools, for example, is cost-benefit analysis. This tool is designed to do precisely what was described above: compare the pluses and minuses of the alternatives and make a choice. In the example to the left, Plan B provides less benefits than Plan A, but its costs are much lower, resulting in a greater net benefit.

What if the Project Costs Are in Dollars but the Outputs Are Not?

Not all costs and benefits, especially for environmental projects, are readily measured in dollars. Several economic tools exist that help estimate monetary values

1. Specialized analytical methods, such as cost-effectiveness analysis and incremental cost analysis, can be used to allow the "apples and oranges" comparisons of monetary costs and non monetary outputs.

2. Specialized measurement techniques, or nonmarket valuation methods, can be used to estimate the dollar value of environmental goods and services produced by the project tools designed to convert oranges to apples.