IDEAS home Printed from https://ideas.repec.org/a/kap/enreec/v37y2007i4p643-659.html
   My bibliography  Save this article

Economies of scale and the optimality of rotational dynamics in forestry

Author

Listed:
  • Mette Termansen

Abstract

Forest harvesting is traditionally analyzed in terms of the Faustmann rotation model. This paper considers the identification of optimal forest harvest regimes using jump controls. This approach enables the structural assumptions of clear-cut technology and identical cycles in perpetuity which are imposed in a Faustmann model to be relaxed. Jump control models permit investigation of the biological and economic conditions which favour continuous growth management regimes as opposed to clear-cut harvest regimes. A numerical solution approach to the jump control model is presented. The link between the harvest cost function and the optimal biomass path is analyzed. Economies of scale are shown to generate rotational harvest as optimal policies. Copyright Springer Science+Business Media, Inc. 2007

Suggested Citation

  • Mette Termansen, 2007. "Economies of scale and the optimality of rotational dynamics in forestry," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(4), pages 643-659, August.
    • Handle: RePEc:kap:enreec:v:37:y:2007:i:4:p:643-659
    DOI: 10.1007/s10640-007-9081-z
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10640-007-9081-z
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10640-007-9081-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Liski, Matti & Kort, Peter M. & Novak, Andreas, 2001. "Increasing returns and cycles in fishing," Resource and Energy Economics, Elsevier, vol. 23(3), pages 241-258, July.
    2. Sun Joseph Chang, 1982. "An Economic Analysis of Forest Taxation's Impact on Optimal Rotation Age," Land Economics, University of Wisconsin Press, vol. 58(3), pages 310-323.
    3. Dawid, Herbert & Kopel, Michael, 1997. "On the Economically Optimal Exploitation of a Renewable Resource: The Case of a Convex Environment and a Convex Return Function," Journal of Economic Theory, Elsevier, vol. 76(2), pages 272-297, October.
    4. Rust, John, 1996. "Numerical dynamic programming in economics," Handbook of Computational Economics, in: H. M. Amman & D. A. Kendrick & J. Rust (ed.), Handbook of Computational Economics, edition 1, volume 1, chapter 14, pages 619-729, Elsevier.
    5. H. M. Amman & D. A. Kendrick & J. Rust (ed.), 1996. "Handbook of Computational Economics," Handbook of Computational Economics, Elsevier, edition 1, volume 1, number 1.
    6. Samuelson, Paul A, 1976. "Economics of Forestry in an Evolving Society," Economic Inquiry, Western Economic Association International, vol. 14(4), pages 466-492, December.
    7. Tahvonen, Olli & Salo, Seppo & Kuuluvainen, Jari, 2001. "Optimal forest rotation and land values under a borrowing constraint," Journal of Economic Dynamics and Control, Elsevier, vol. 25(10), pages 1595-1627, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Coordes, Renke, 2016. "The emergence of forest age structures as determined by uneven-aged stands and age class forests," Journal of Forest Economics, Elsevier, vol. 25(C), pages 160-179.
    2. Alain Jean-Marie & Mabel Tidball & Michel Moreaux & Katrin Erdlenbruch, 2009. "The Renewable Resource Management Nexus: Impulse versus Continuous Harvesting Policies," Working Papers 09-03, LAMETA, Universtiy of Montpellier, revised Mar 2009.
    3. Konstantinos Petridis & Garyfallos Arabatzis & Angelo Sifaleras, 2020. "Mathematical optimization models for fuelwood production," Annals of Operations Research, Springer, vol. 294(1), pages 59-74, November.
    4. Nguyen, Trung Thanh & Nghiem, Nhung, 2016. "Optimal forest rotation for carbon sequestration and biodiversity conservation by farm income levels," Forest Policy and Economics, Elsevier, vol. 73(C), pages 185-194.
    5. Petri P Kärenlampi, 2019. "Wealth accumulation in rotation forestry – Failure of the net present value optimization?," PLOS ONE, Public Library of Science, vol. 14(10), pages 1-19, October.
    6. Nghiem Thi Hong Nhung, 2016. "Optimal Forest Management for Carbon Sequestration: A Case Study of Eucalyptus urophylla and Acacia mangium in Yen Bai Province, Vietnam," EEPSEA Research Report rr2016046, Economy and Environment Program for Southeast Asia (EEPSEA), revised Apr 2016.
    7. Nikolaos Mykoniatis & Richard Ready, 2016. "Spatial Harvest Regimes for a Sedentary Fishery," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(2), pages 357-387, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Newman, D.H., 2002. "Forestry's golden rule and the development of the optimal forest rotation literature," Journal of Forest Economics, Elsevier, vol. 8(1), pages 5-27.
    2. Maurizio Iacopetta, 2014. "Dynamics of assets liquidity and inequality in economies with decentralized markets," Sciences Po publications info:hdl:2441/2029nqlehl8, Sciences Po.
    3. Mutschler, Willi, 2018. "Higher-order statistics for DSGE models," Econometrics and Statistics, Elsevier, vol. 6(C), pages 44-56.
    4. Lilia Maliar & Serguei Maliar & John B. Taylor & Inna Tsener, 2020. "A tractable framework for analyzing a class of nonstationary Markov models," Quantitative Economics, Econometric Society, vol. 11(4), pages 1289-1323, November.
    5. Di Nicolo, G. & Gamba, A. & Lucchetta, M., 2011. "Capital Regulation, Liquidity Requirements and Taxation in a Dynamic Model of Banking," Discussion Paper 2011-090, Tilburg University, Center for Economic Research.
    6. Nguyen, Trung Thanh & Nghiem, Nhung, 2016. "Optimal forest rotation for carbon sequestration and biodiversity conservation by farm income levels," Forest Policy and Economics, Elsevier, vol. 73(C), pages 185-194.
    7. John Stachurski, 2009. "Economic Dynamics: Theory and Computation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012774, December.
    8. Lohano, Heman Das, 2002. "A Stochastic Dynamic Programming Analysis of Farmland Investment and Financial Management," Faculty and Alumni Dissertations 309035, University of Minnesota, Department of Applied Economics.
    9. Kenneth L. Judd & Lilia Maliar & Serguei Maliar & Inna Tsener, 2017. "How to solve dynamic stochastic models computing expectations just once," Quantitative Economics, Econometric Society, vol. 8(3), pages 851-893, November.
    10. Aruoba, S. Boragan & Fernandez-Villaverde, Jesus & Rubio-Ramirez, Juan F., 2006. "Comparing solution methods for dynamic equilibrium economies," Journal of Economic Dynamics and Control, Elsevier, vol. 30(12), pages 2477-2508, December.
    11. Kato, Ryo & Nishiyama, Shin-Ichi, 2005. "Optimal monetary policy when interest rates are bounded at zero," Journal of Economic Dynamics and Control, Elsevier, vol. 29(1-2), pages 97-133, January.
    12. Andriy Norets, 2009. "Inference in Dynamic Discrete Choice Models With Serially orrelated Unobserved State Variables," Econometrica, Econometric Society, vol. 77(5), pages 1665-1682, September.
    13. Victor Aguirregabiria & Pedro Mira, 2002. "Swapping the Nested Fixed Point Algorithm: A Class of Estimators for Discrete Markov Decision Models," Econometrica, Econometric Society, vol. 70(4), pages 1519-1543, July.
    14. Song Lin & Juanjuan Zhang & John R. Hauser, 2015. "Learning from Experience, Simply," Marketing Science, INFORMS, vol. 34(1), pages 1-19, January.
    15. Justin McCrary, 2010. "Dynamic Perspectives on Crime," Chapters, in: Bruce L. Benson & Paul R. Zimmerman (ed.), Handbook on the Economics of Crime, chapter 4, Edward Elgar Publishing.
    16. Barillas, Francisco & Fernandez-Villaverde, Jesus, 2007. "A generalization of the endogenous grid method," Journal of Economic Dynamics and Control, Elsevier, vol. 31(8), pages 2698-2712, August.
    17. Christiano, Lawrence J. & Fisher, Jonas D. M., 2000. "Algorithms for solving dynamic models with occasionally binding constraints," Journal of Economic Dynamics and Control, Elsevier, vol. 24(8), pages 1179-1232, July.
    18. Katrin Erdlenbruch & Alain Jean-Marie & Michel Moreaux & Mabel Tidball, 2013. "Optimality of impulse harvesting policies," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(2), pages 429-459, March.
    19. Jones, John B, 2003. "The Dynamic Effects of Firm-Level Borrowing Constraints," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 35(5), pages 743-762, October.
    20. Serguei Maliar & John Taylor & Lilia Maliar, 2016. "The Impact of Alternative Transitions to Normalized Monetary Policy," 2016 Meeting Papers 794, Society for Economic Dynamics.

    More about this item

    Keywords

    Economies of scale; Faustmann; Forest management; Jump controls; Stock discontinuities; Q23; C61;
    All these keywords.

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:37:y:2007:i:4:p:643-659. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.