Optimal exploitation of a renewable resource with capital limitations
AbstractA model of interaction between a renewable natural resource with capital limitations, as exemplified by the optimal investment problem of sheep farming in a Nordic context, is analyzed. The model builds on existing studies from the fisheries literature, but the important difference is that while capital is related to harvesting effort in the fisheries, capital attributes to production capacity to keep the animal stock during the winter in our farm model. The paper provides several results where both optimal steady states and the optimal approach paths are characterized analytically. The results are further supported by a numerical example.
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Bibliographic InfoPaper provided by Department of Economics, Norwegian University of Science and Technology in its series Working Paper Series with number 12912.
Length: 36 pages
Date of creation: 30 May 2012
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-06-05 (All new papers)
- NEP-DGE-2012-06-05 (Dynamic General Equilibrium)
- NEP-ENV-2012-06-05 (Environmental Economics)
- NEP-RES-2012-06-05 (Resource Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Richard D. Horan & Christopher A. Wolf, 2005. "The Economics of Managing Infectious Wildlife Disease," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(3), pages 537-551.
- Sandal, Leif Kristoffer & Steinshamn, Stein Ivar, 2006. "Irreversible Investments Revisited," Discussion Papers 2006/11, Department of Business and Management Science, Norwegian School of Economics.
- McKelvey, Robert, 1985. "Decentralized regulation of a common property renewable resource industry with irreversible investment," Journal of Environmental Economics and Management, Elsevier, vol. 12(4), pages 287-307, December.
- Johannesen, Anne B. & Nielsen, Anders & Skonhoft, Anders, 2013. "Livestock management at northern latitudes," Ecological Economics, Elsevier, vol. 93(C), pages 239-248.
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