An Equilibrium Model of Habitat Conservation under Uncertainty and Irreversibility
AbstractIn this paper stochastic dynamic programming is used to investigate habitat conservation by a multitude of landholders under uncertainty about the value of environmental services and irreversible development. We study land conversion under competition on the market for agricultural products when voluntary and mandatory measures are combined by the Government to induce adequate participation in a conservation plan. We analytically determine the impact of uncertainty and optimal policy conversion dynamics and discuss different policy scenarios on the basis of the relative long-run expected rate of deforestation. Finally, some numerical simulations are provided to illustrate our findings.
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Bibliographic InfoPaper provided by Dipartimento di Scienze Economiche "Marco Fanno" in its series "Marco Fanno" Working Papers with number 0122.
Length: 41 pages
Date of creation: Dec 2010
Date of revision:
optimal stopping; deforestation; payments for environmental services; Natural Resources Management.;
Other versions of this item:
- Luca Di Corato & Michele Moretto & Sergio Vergalli, 2010. "An Equilibrium Model of Habitat Conservation under Uncertainty and Irreversibility," Working Papers 2010.160, Fondazione Eni Enrico Mattei.
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2011-04-02 (Agricultural Economics)
- NEP-ALL-2011-04-02 (All new papers)
- NEP-CMP-2011-04-02 (Computational Economics)
- NEP-DGE-2011-04-02 (Dynamic General Equilibrium)
- NEP-ENV-2011-04-02 (Environmental 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.:
- Maestad, Ottar, 2001. "Timber trade restrictions and tropical deforestation: a forest mining approach," Resource and Energy Economics, Elsevier, vol. 23(2), pages 111-132, April.
- Luca Corato & Michele Moretto & Sergio Vergalli, 2013.
"Land conversion pace under uncertainty and irreversibility: too fast or too slow?,"
Journal of Economics,
Springer, vol. 110(1), pages 45-82, September.
- Luca Di Corato & Michele Moretto & Sergio Vergalli, 2011. "Land Conversion Pace under Uncertainty and Irreversibility: too fast or too slow?," Working Papers 2011.84, Fondazione Eni Enrico Mattei.
- Luca Di Corato, 2011.
"Optimal Conservation Policy Under Imperfect Intergenerational Altruism,"
2011.89, Fondazione Eni Enrico Mattei.
- Di Corato, Luca, 2011. "Optimal Conservation Policy under Imperfect Intergenerational Altruism," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114440, European Association of Agricultural Economists.
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