Harvesting and recovery decisions under uncertainty

A stochastic forest rotation model in the Faustmann tradition is presented and exemplified. The model combines harvesting decisions with the potential to recover or clean up to restore the land after very unfavorable evolutions of the stochastic growth process. Uncertainty is shown to have a generally ambiguous effect on the optimal choice of investment strategy. It is also shown how such models can be related to theory of optimal inventory control.

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Year of publication:	2010
Authors:	Shackleton, Mark B. ; Sødal, Sigbjørn
Published in:	Journal of Economic Dynamics and Control. - Elsevier, ISSN 0165-1889. - Vol. 34.2010, 12, p. 2533-2546
Publisher:	Elsevier
Keywords:	Investment Uncertainty Forest growth Real options

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008864742