The preservation of biodiversity is widely recognized to be an important national aim. Yet, very little actual help is available, even at a high level of abstraction, to guide policy makers towards the goal of optimally preserving biodiversity in a world of limited budgets. It is not even clear how to give a quantitative description of what policy makers are actually doing in practice. The main objective of this study is to create a normative and descriptive framework for analyzing the economics of biodiversity preservation. On the normative side, the goal is to construct a cost-benefit methodology that can be used to rank priorities among biodiversity preserving projects. The basic ranking criterion is a specific formula that, for the case of endangered species, combines an appropriate measure of "distinctiveness" with direct utility, change in survival probability, and cost. A rigorous justification for this ranking criterion is provided by a straightforward optimization model. On the descriptive side, the goal is to combine a number of biological and economic data sets to investigate econometrically the "revealed preference" behind spending on endangered species. Some very preliminary results seem to indicate that the "visceral" direct utility factor is far more important than the more "scientific" factors of distinctiveness, survival probability, or cost. ***
