The expected net return to storage is conventionally calculated as the expected change in price over the storage period minus the cost of storage. However, this value is almost always negative, thus raising the question why would anyone store. Numerous explanations have been proposed, but none...

An updated supply of storage equation is estimated to reflect recent developments in the theoretical and empirical literature. Among the findings is an inverse relationship between storage cost adjusted price spread and a proxy measure of convenience yield, and a curvilinear relationship between...

The value of the timing option implicit in CBOT corn futures contract is estimated. Separate estimates are obtained for the option without and with convenience yield. The effect of the option on basis behavior at day one of the maturity month is examined and is found statistically significant.

Optimal recycling of minerals can be thought of as an integral part of the theory of the mine. In this paper, we consider the role that wastewater recycling plays in the optimal extraction of groundwater, a renewable resource. We develop a two-sector dynamic optimization model to solve for the...

We imbed a classic fishery model, where the optimal policy follows a Most Rapid Approach Path to a steady state, into an overlapping generations setting. The current generation discounts future generations’ utility flows at a rate possibly different from the pure rate of time preference...

We imbed a classic fishery model, where the optimal policy follows a Most Rapid Approach Path to a steady state, into an overlapping generations setting. The current generation discounts future generations’ utility flows at a rate possibly different from the pure rate of time preference used...

Federal renewable energy R&D spending is intended, at least in part, to achieve path-breaking commercial breakthroughs in ethanol, hydrogen, solar and wind energy. Recently, the private sector has begun to respond to market opportunities generated by the spike in oil prices and governmental...

Livestock grazing on public lands continues to be a source of intense conflict and debate. We analyze this problem using a dynamic game. Low grazing fees let ranchers capture more rent from grazing. This increases the incentive to comply with federally mandated regulations. Optimal grazing...