I take it you have looked at the work of Richard R. Nelson and other evolutionary economists. There are also researchers who combined economic geography with evolutionary economics, e.g. Koen Frenken of Utrecht University in the Netherlands.

Amiraal et al. (2013) present a  framework for combining ecological theory with economic insights about capital management. Analogous to financial capital management, sustainable ecosystem management aims to maximize the delivery of ecosystem services while ensuring that the state of ecosystem is maintained.

Admiraal, J.F., Wossink, A., de Groot, W.T., de Snoo, G.R. (2013) More than total economic value: How to combine economic valuation of biodiversity with ecological resilience, Ecological Economics 89: 115-122. See attachment 

This paper starts from the shortcomings of the concept of Total Economic Value (TEV) for ecosystem service valuation. The main message of the paper is that those shortcomings can be addressed by using ecological insights about ecosystem resilience and economic portfolio theory applied to investment in biodiversity. If biodiversity is considered a portfolio of natural assets (Weitzman, 2000) the link with portfolio theory is obvious.  Portfolio theory came about in economic research, because a need for diversification in investment was recognized, but the value of diversification was still to be described. In ecosystem services management we observe a similar situation. Portfolio theory enables TEV to be expanded to cover functional diversity and mobile link species to maintain ecosystem resilience in order to foster sustainable use of ecosystems.

Article More than total economic value: How to combine economic valu...

Dear Salvador,

MacArthur and Wilson's (1967) Island biography theory is based upon equilibrium achieved between  extinction rate and immigration rate of species. Moreover, distance to  and size of the mainland also influence this rate.

On the other hand Keynesian economics says government intervention is needed to improve the aggregate demand since free market economy ha no self balancing mechanism to reach  full employment.

  Island biography theory is based on self-balancing mechanism which also influenced by the size and the distance from mainland.  In contrast, Kensian theory says no self-balancing mechanism. Then where is the analogy rather than a contrast?

 Upananda

Not sure, but I think social networks and trade routes will be your "distance" factors, as applied to island biogeography models, while market size will be your island size.

I think most economists will not properly understand this theory in the sense of ecology and evolution. Consider how this theory can be applied to understand distributions of pesticide resistance in different communities/varieties of crops and pests, or the existence of populations of wildlife, and how size and distance of/between habitat areas affect these.

Really, I struggle to think of an appropriate use of island biogeography models for economics, unless you're modelling pesticide resistance and agricultural productivity when different levels of applications are considered ... or perhaps to add some realistic source of variance to fisheries models, with random possibilities of some populations being established elsewhere when a local fishery is fished out.

Dear Nathan,

Pesticide resistance emerge as a response to frequent use of indiscriminate use of pesticides in higher dosages. Pests who survive from pesticide toxicity, may develop resistance to that  particular pesticides.

For development of pesticide resistance,  island bio geography theory (IBT) cannot be applied. Because resistance is developed  within pest itself.  Then where is the analogy?

Upananda Sri Lanka

My point is that there might not be a very strong analogy.

But precisely the area where I learned about island biogeography theory was at one of those snobbishly great research schools, where they teach about refuge areas, whereas certain pests can get to and survive with non-resistant traits, but where the practical application is to rotate pesticides and use combinations so that they cannot evolve such strong resistance.

It is not so much about the pest that evolves the resistance, but the presence of populations which can survive without resistance, and therefore the existence of populations which do not have the additional biological costs of dealing with the pesticide, which may then outcompete the resistant populations when switching pesticides. It is theoretical work on refuges, multicropping, and pesticide rotations and combinations. I do not know how well it stands up in practice, but if I remember right, the strongest evidence is with difference rice varieties. Some folks in the University of Toronto ecology and microbiology sub-departments have written some articles on this, and they taught me what little I remember of this.

Analogies in the form of a paradigm (that is populated with models) that economists use to consider internationalization of businesses (from isolationism to edge effects), niche-creation (often veiled as the setup of Free Trade Areas, clustering and agglomeration), colonizations (often veiled as Foreign Direct Investments).

Recommended primer: http://www.exeter.ac.uk/media/universityofexeter/internationalexeter/documents/iss/Dunning_IBR_2000.pdf

On a literal treatment of the impact of economics on the environment the common denominator in energy transformations: http://dieoff.org/page148.htm