Transaction costs economics of irreplaceability: ex ante and ex post evaluation of conservation networks' vulnerability to environmental shocks.

The theoretical concept, "asset specificity," is applied to real data in the context of Danish nature conservation network planning in order to produce illustrative examples of an economic measure of the network's vulnerability to exogenous shocks to the species composition. Three different measures of asset specificity are quantified from the shadow value of eliminating a key species from the individual grid cells. This represents a novel approach and a different interpretation of the term, as it is conventionally used as a qualitative indicator in the transaction cost economics literature. Apart from supplementing existing cost measures with an indicator of risk associated with investments in protected areas, this study demonstrates how the estimation and interpretation of various asset specificity measures for geographical areas may qualify policy makers' choice of policy instrument in conservation planning. This differs from the more intuitive approach of basing policy instrument choice solely on the rarity of the species in a given area.