On the Elasticities of Harvesting Rules

By Fwu-Ranq Chang. Social Science Research Network, 2005

52 citations recorded by the source corpus.

In this paper, we rank the relative importance of the exogenous parameters upon the optimal harvesting size in a stochastic rotation problem. We show that when the tree growth follows geometric Brownian motion, the harvesting size is most elastic to the harvesting cost, followed by the interest rate, and is least elastic to the parameters of tree growth. Similar ranking holds for the linear growth case. In both cases the harvesting size is increasing and concave in the harvesting cost, bounded between two parallel lines. The harvesting decision is made according to a stochastic extension of the Faustmann formula.

View Paper: https://www.semanticscholar.org/paper/cb67050b65bcf973a6832c3a74301655cc4854c4

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Citations in the corpus

• Does Risk Aversion Accelerate Optimal Forest Rotation Under Uncertainty? (2006, background): “…of risk of forest fire (see e.g. Reed 1984), stochastic forest stand value (see e.g. Clarke and Reed 1989, 1990, Willassen 1998, Alvarez 2004 and Chang 2004) and stochastic timber prices (see e.g. Insley 2002 and Plantinga 1998) on the optimal harvesting threshold and on the expected rotation…”