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An ecological golden rule

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  • Fishman, Ram
  • B Krishnamurthy, Chandra Kiran

Abstract

Most renewable biotic resources are subject to random variability in natural growth. We investigate the implications of such variability for long-term management by a risk averse social planner, who maximizes expected long-run utility. In the canonical model of a stochastic fishery, we show that the optimal level of harvesting effort need not necessarily be reduced by variability in stock growth. However, optimal effort is reduced if variability of growth increases for smaller base populations, as suggested in the ecology literature.

Suggested Citation

  • Fishman, Ram & B Krishnamurthy, Chandra Kiran, 2021. "An ecological golden rule," Resource and Energy Economics, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:resene:v:64:y:2021:i:c:s092876552100004x
    DOI: 10.1016/j.reseneeco.2021.101219
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    More about this item

    Keywords

    Stochastic growth; Natural resource; Golden rule; Q20; Q22;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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