arXiv subjects

Daniele Rinaldo

Publications and source records attributed to Daniele Rinaldo.

7 recordsLinked to original sources

arXiv2026

Bringing the economics of biodiversity into policy and decision-making: A target and cost-based approach to pricing biodiversity

Given ongoing, human-induced, loss of wild species we propose the Target and Cost Analysis (TCA) approach as a means of incorporating biodiversity within government appraisals of public spending. Influenced by how carbon is priced in countries around the world, the resulting biodiversity shadow price reflects the marginal cost of meeting government targets while avoiding disagreements on the use of willingness to pay measures to value biodiversity. Examples of how to operationalize TCA are developed at different scales and for alternative biodiversity metrics, including extinction risk for Europe and species richness in the UK. Pricing biodiversity according to agreed targets allows trade-offs with other wellbeing-enhancing uses of public funds to be sensibly undertaken without jeopardizing those targets, and is compatible with international guidelines on Cost Benefit Analysis.

econ.GN↗

arXiv2025

Sacred Ecology

Can religions shape ecosystems? We explore the role religious beliefs play in human-environment interactions by studying African Traditional Religions (ATR), which place forests within a sacred sphere. We focus on the unique case of Benin, whose history is deeply intertwined with traditional religions and where adherence is reliably reported. By exploiting three sources of exogenous variation in Benin's exposure to Charismatic Pentecostalism, we find that increase in ATR adherence yields positive changes in both forest and tree canopy cover. This increase is driven by sustainable land use policies rather than cooperation and shared governance mechanisms. To understand how ATR beliefs shape the way individuals combine the sacred and the ecology in their preferences, we build a theoretical framework of deforestation with heterogeneous pro-environmental attitudes driven by ATR adherence. Bringing the model to the data, we estimate that without any ATR adherence Benin would experience a loss of 10% of its tree canopy area, and would exhibit unsustainable deforestation rates. Our results show how ATR beliefs can play a fundamental role in forest and ecosystem conservation.

econ.GN↗

arXiv2025

Skew-Normal Diffusions

We construct a class of stochastic differential equations driven by White Gaussian noise sources whose solutions can be drawn from skewed Gaussian probability laws, here referred as skew-Normal diffusion (SKN) processes. The non-Gaussian character results from implementing a nonlinear and time-inhomogneous drift constructed via ad-hoc changes of probability measure (i.e. Doob's $h$-transform). The SKN processes can be alternatively constructed as dynamic censoring models. While explicitly non-Gaussian, the SKN processes share several properties of Gaussian processes, in particular the invariance under linear transformations. This result allows us to discuss analytically the characteristics of this class of stochastic dynamics. As an illustration, we show how linear noisy monitoring of SKN processes yields a solvable finite dimensional and non-linear stochastic filtering which naturally extends the Kalman-Bucy Gaussian case.

math.PR↗

arXiv2025

A general relationship between extinction risk and carrying capacity

Understanding the relationship between a populations probability of extinction and its carrying capacity frames conservation status assessments and guides efforts to understand and mitigate the ongoing biodiversity crisis. Despite this, our understanding of the mathematical form of this relationship remains limited. We conducted ~5 billion population viability assessments that jointly converge on a modified Gompertz curve. This pattern is consistent across >1700 distinct model populations, representing different breeding systems and widely varying rates of population growth, levels of environmental stochasticity, adult survival rate, age at first breeding, and initial population size. Analytical treatment of the underlying dynamics shows that few assumptions suffice to show that the relationship holds for any extant population subject to density-dependent growth. Finally, we discuss the implications of these results and consider the practical use of our findings by conservationists.

q-bio.PE↗

arXiv2024

Quickest Detection of Ecological Regimes for Natural Resource Management

We study the stochastic dynamics of natural resources under the threat of ecological regime shifts. We establish a Pareto optimal framework of regime shift detection under uncertainty that minimizes the delay with which economic agents become aware of the shift. We integrate ecosystem surveillance in the formation of optimal resource extraction policies. We fully solve the case of a profit-maximizing monopolist, study its response to regime shift detection and show the generality of our framework by extending our results to other decision makers and functional forms.We apply our framework to the case of the Cantareira water reservoir in São Paulo, Brazil, and study the events that led to its depletion and the consequent water supply crisis.

econ.GN↗

arXiv2022

Can one hear the shape of a target zone?

We develop an exchange rate target zone model with finite exit time and non-Gaussian tails. We show how the tails are a consequence of time-varying investor risk aversion, which generates mean-preserving spreads in the fundamental distribution. We solve explicitly for stationary and non-stationary exchange rate paths, and show how both depend continuously on the distance to the exit time and the target zone bands. This enables us to show how central bank intervention is endogenous to both the distance of the fundamental to the band and the underlying risk. We discuss how the feasibility of the target zone is shaped by the set horizon and the degree of underlying risk, and we determine a minimum time at which the required parity can be reached. We prove that increases in risk after a certain threshold can yield endogenous regime shifts where the ``honeymoon effects'' vanish and the target zone cannot be feasibly maintained. None of these results can be obtained by means of the standard Gaussian or affine models. Numerical simulations allow us to recover all the exchange rate densities established in the target zone literature. The generality of our framework has important policy implications for modern target zone arrangements.

econ.GN↗

arXiv2018

Increasing Risk: Dynamic Mean-Preserving Spreads

We extend the celebrated Rothschild and Stiglitz (1970) definition of Mean-Preserving Spreads to a dynamic framework. We adapt the original integral conditions to transition probability densities, and give sufficient conditions for their satisfaction. We then prove that a specific nonlinear scalar diffusion process, super-diffusive ballistic noise, is the unique process that satisfies the integral conditions among a broad class of processes. This process can be generated by a random superposition of linear Markov processes with constant drifts. This exceptionally simple representation enables us to systematically revisit, by means of the properties of Dynamic Mean-Preserving Spreads, four workhorse economic models originally based on White Gaussian Noise.

math.PR↗