6533b7dafe1ef96bd126f541

RESEARCH PRODUCT

Harvesting and recovery decisions under uncertainty

Sigbjørn SødalMark B. Shackleton

subject

MicroeconomicsInventory controlEconomics and EconometricsControl and OptimizationInvestment strategyProcess (engineering)Applied MathematicsEconomicsInvestment (macroeconomics)Rotation model

description

Abstract 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.

yearjournalcountryeditionlanguage
2010-12-01Journal of Economic Dynamics and Control
https://doi.org/10.1016/j.jedc.2010.07.003