Dynamic reserve site selection∗

Establishing biological reserves in key habitats is one method of preventing loss of biodiversity. We analyze a dynamic reserve site selection model in which a conservation planner receives a budget each period to purchase sites of heterogeneous cost and ecological value in order to maximize species conserved. Sites chosen as reserved are conserved, while sites left outside the reserve system are threatened by development. We formulate this problem as a stochastic dynamic integer programming problem. We solve several examples to illustrate how sequential choice compares with static choice in which all selections can be made at one time. We also compare optimal solutions with solutions obtained using simple heuristic choice algorithms. In general, an ”informed” heuristic algorithm that accounts for both biodiversity values and development threats across sites results in a small percentage loss in the expected number of species conserved relative to the optimum. The performance of heuristic algorithms diminishes as the time horizon and number of sites increases. The theory is applied to vertebrate and development threat data from southwestern California. JEL Classification: R52, Q20