Peter S. Burton () (Department of Economics, Dalhousie University)
Abstract
This paper presents a dynamic model of forestry in which the planner chooses the rates of harvest and planting at each instant. The use of a forest-level analysis in which the area of each cohort is monitored and in which the rates (rather than frequencies) of harvest and planting are chosen allows the shadow prices and first order conditions to be easily interpreted. Moreover, the results yield an easily interpreted golden rule for the optimal rate of harvest. The Faustmann model is shown to be a special case of the dynamic model and it is also shown how nonharvest values can be incorporated into the analysis.
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