FIGURE 5 ILLUSTRATION OF INDICATOR DEVELOPMENT AND APPLICATION:

IMPROVING FUNCTIONAL CAPACITY AT SITE A vs SITE B

WILDLIFE HABITAT FISHERY SUPPORT NUTRIENT TRAPPING
	SITE A	SITE B	SITE A	SITE B	SITE A	SITE B
FUNCTIONAL CAPACITY INDEX	1.0	1.0	1.0	1.0	1.0	1.0
CAPACITY UTILIZATION SUBINDEX	X 1.2	X 0.8	X 1.2	X 0.8	X 1.2	X 0.8
LEVEL OF FUNCTION	1.2	0.8	1.2	0.8	1.2	0.8
SERVICE CAPACITY SUBINDEX	X 1.2	X 0.8	X 1.2	X 0.8	X 1.2	X 0.8
LEVEL OF SERVICE	1.44	0.64	1.44	0.64	1.44	0.64
VALUE OF SERVICE SUBINDEX	X 1.2	X 0.8	X 1.2	X 0.8	X 1.2	X 0.8
VALUE	1.73	0.51	1.73	0.51	1.73	0.51
RISK OF SERVICE SUBINDEX	X 1.2	X 0.8	X 1.2	X 0.8	X 1.2	X 0.8
ADJUSTED VALUE	2.07	0.41	2.07	0.41	2.07	0.41

Value Index per unit Functional Capacity and, within limits, per unit change in Functional Capacity

SITE A 2.074 (1 x 1.2 x 1.2 x 1.2 x 1.2)

SITE B 0.410 (1 x 0.8 x 0.8 x 0.8 x 0.8)

Conclusion: Site A and Site B are identical in size, shape and biophysical characteristics. However, based on differences in landscape context, the ¡¦value¡¦ of Site A is 4 times higher than the ¡¦value¡¦ of Site B [((2.074 ¡¦ 0.410)/0.410)=4.06]. Within limits, increasing the functional capacity at Site A will result in 4 times the economic benefits as increasing the capacity at Site B. If costs per unit of capacity restoration are the same at both sites, the benefit-cost ratio of restoration investments at Site A is 4 times higher than Site B. Note that investments to improve the landscape context of Site B could yield greater payoff than investing directly at either site.