What Is Bioeconomics?
Bioeconomics is a progressive branch of social science that seeks to integrate the disciplines of economics and biology for the sole purpose of creating theories that do a better job of explaining economic events using a biological basis and vice versa.
- Bioeconomics is a progressive branch of social science that seeks to integrate the disciplines of economics and biology to explain economic events.
- Bioeconomics can help with managing resources, with the goal of avoiding resource depletion.
- Bioeconomic modeling is much like economic modeling, factoring in natural resource management.
The proponents of bioeconomics believe that the same patterns that can be seen in biological evolution can be applied to stock market behavior, as many of the same "causal interactions" and "survival elements" can be found there as well as in nature.
In nature, we see groups of different organisms working together to best utilize the resources needed to sustain life, while still promoting a "survival of the fittest" framework. Like behavioral finance and other applied economic schools, bioeconomics is another example of economic theory branching out of classical boundaries and attempting to better explain the complex economies of today.
Still, the idea of finding the best utilization of biological resources for the economy is nothing new. Bioeconomics can help with managing resources, with the goal of avoiding resource depletion. Managing natural resources can be done with bioeconomics. The practice involves figuring out the best way to manage socioeconomic behavior sustainably.
Bioeconomic modeling is much like economic modeling, factoring in natural resource management. With the help of modeling, bioeconomics can help determine optimal natural resource usage. This includes agriculture's impact on water availability or other factors. In many cases, modeling can help determine potential pitfalls that might be overlooked or misunderstood.
The most notable use of bioeconomics and modeling is looking at the exploitation of marine life. This includes calculating optimal harvesting and activity over time. To determine exploitation, the three key factors include natural growth rate, price-cost ratio, and opportunity cost. Ultimately, extinction or resource depletion is driven by a low natural growth rate, high price-cost ratio, and high opportunity cost.
A company is contemplating filling in a mangrove to build a strip mall near a residential area. From an economics standpoint, the company explores the money and resources needed to convert the mangrove into usable land and then comparing that to expected cash flows from the mall.
From a bioeconomics standpoint, the company would not only look at the supply and demand but also gauge the biological and environmental impact of such a move. That is, the mangrove is home to many plants and animals, including fish that eat algae. With the stock market, supply and demand drive the economic theory. However, bioeconomics considers the survival instinct aspect, factoring in resource depletion and utilization.