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Land allocation between a multiple-stand forest and agriculture under storm risk and recursive preferences

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  • Gaspard Dumollard
  • Stéphane de Cara

    (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech)

Abstract

This study aims to characterize steady-state land allocations between a multiple-stand forest and agriculture, when the forest is subject to a storm risk. The landowner is supposed to have recursive preferences, which permits to distinguish between in-tertemporal preferences and risk preferences. Using a stochastic dynamic programming model, we show that both land allocation and forest management depend on the risk and on both types of preferences at the steady-state. Risk aversion is shown to favor land allocation to agriculture and to reduce the forest average harvest age while the preference for a regular income is shown to favor forestry and to reduce the average harvest age.

Suggested Citation

  • Gaspard Dumollard & Stéphane de Cara, 2018. "Land allocation between a multiple-stand forest and agriculture under storm risk and recursive preferences," Post-Print hal-01671595, HAL.
    • Handle: RePEc:hal:journl:hal-01671595
    DOI: 10.1080/21606544.2017.1409654
    Note: View the original document on HAL open archive server: https://hal.science/hal-01671595
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    Cited by:

    1. Dumollard, Gaspard, 2018. "Multiple-stand forest management under fire risk: Analytical characterization of stationary rotation ages and optimal carbon sequestration policy," Journal of Forest Economics, Elsevier, vol. 32(C), pages 146-154.

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    Keywords

    Land allocation; Forest management; Recursive preferences; Stochastic Dynamic Programming;
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