IDEAS home Printed from https://ideas.repec.org/p/ags/usuesp/28356.html

The Impact Of Information On Land Development: A Dynamic And Stochastic Analysis

Author

Listed:
  • Batabyal, Amitrajeet A.

Abstract

In a two-period model, economists such as K.J. Arrow, A.C. Fisher, and C. Henry, have shown that when development is both indivisible and irreversible, a developer who ignores the possibility of obtaining new information about the outcome of such development will invariably underestimate the benefits of preservation and hence favor development. In this note, I extend the AFH analysis in two directions. I model the land development problem in a dynamic framework, explicitly specifying an information production function. In such a setting, I then ask and answer the question concerning when development should take place. Forthcoming in Journal of Environmental Management

Suggested Citation

  • Batabyal, Amitrajeet A., 1995. "The Impact Of Information On Land Development: A Dynamic And Stochastic Analysis," Economics Research Institute, ERI Study Papers 28356, Utah State University, Economics Department.
    • Handle: RePEc:ags:usuesp:28356
    DOI: 10.22004/ag.econ.28356
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/28356/files/eri9513.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.28356?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kenneth J. Arrow & Anthony C. Fisher, 1974. "Environmental Preservation, Uncertainty, and Irreversibility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 88(2), pages 312-319.
    2. Epstein, Larry G, 1980. "Decision Making and the Temporal Resolution of Uncertainty," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(2), pages 269-283, June.
    3. Hanemann, W. Michael, 1989. "Information and the concept of option value," Journal of Environmental Economics and Management, Elsevier, vol. 16(1), pages 23-37, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Narain, Urvashi & Hanemann, W. Michael & Fisher, Anthony C., 2004. "The Temporal Resolution of Uncertainty and the Irreversibility Effect," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt7nn328qg, Department of Agricultural & Resource Economics, UC Berkeley.
    2. Attanasi, Giuseppe Marco & Montesano, Aldo, 2010. "Testing Value vs Waiting Value in Environmental Decisions under Uncertainty," TSE Working Papers 10-154, Toulouse School of Economics (TSE).
    3. Narain, Urvashi & Hanemann, W. Michael & Fisher, Anthony C, 2007. "The irreversibility effect in environmental decisionmaking," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt7bc5t8cf, Department of Agricultural & Resource Economics, UC Berkeley.
    4. Batabyal, Amitrajeet A., 1998. "Land development and preservation over time and under uncertainty: a review and a research agenda," Ecological Economics, Elsevier, vol. 25(3), pages 233-238, June.
    5. Batabyal, Amitrajeet A, 1998. "On land use, minerals development, and institutional design in the American west," Resources Policy, Elsevier, vol. 24(3), pages 139-146, September.
    6. Laurent Gilotte & Michel de Lara, 2005. "Precautionary Effect and Variations of the Value of Information," Working Papers 2005.28, Fondazione Eni Enrico Mattei.
    7. Jinhua Zhao & Catherine L. Kling, 1998. "Real Options and the WTP/WTA Disparity," Center for Agricultural and Rural Development (CARD) Publications 99-wp206, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    8. Graham-Tomasi, Ted, 1993. "Quasi-Option Value," Staff Paper Series 201173, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    9. Jinhua Zhao & Catherine L. Kling, 2004. "Willingness to Pay, Compensating Variation, and the Cost of Commitment," Economic Inquiry, Western Economic Association International, vol. 42(3), pages 503-517, July.
    10. Hess, Joshua H. & Manning, Dale T. & Iverson, Terry & Cutler, Harvey, 2019. "Uncertainty, learning, and local opposition to hydraulic fracturing," Resource and Energy Economics, Elsevier, vol. 55(C), pages 102-123.
    11. Salanié, François & Treich, Nicolas, 2009. "Option Value and Flexibility: A General Theorem with Applications," TSE Working Papers 09-002, Toulouse School of Economics (TSE).
    12. Kolstad, Charles D., 1996. "Fundamental irreversibilities in stock externalities," Journal of Public Economics, Elsevier, vol. 60(2), pages 221-233, May.
    13. Albers, Heidi, 2001. "A Spatial-Intertemporal Model for Tropical Forest Management Applied to Khao Yai National Park, Thailand," RFF Working Paper Series dp-01-35, Resources for the Future.
    14. Zhao, Jinhua & Kling, Catherine L., 2001. "A new explanation for the WTP/WTA disparity," Economics Letters, Elsevier, vol. 73(3), pages 293-300, December.
    15. Graham-Tomasi, Theodore, 1985. "Uncertainty, Information, And Irreversible Investments," Staff Papers 14047, University of Minnesota, Department of Applied Economics.
    16. Batabyal, Amitrajeet A., 1995. "An Agenda For The Study Of Land Use, Wilderness Designation, And Resource Regulation In The American West," Economics Research Institute, ERI Study Papers 28360, Utah State University, Economics Department.
    17. Michael Finus & Pedro Pintassilgo & Alistair Ulph, 2014. "International Environmental Agreements with Uncertainty, Learning and Risk Aversion," Department of Economics Working Papers 19/14, University of Bath, Department of Economics.
    18. Giovanni Immordino, 2005. "Uncertainty and the Cost of Reversal," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 30(2), pages 119-128, December.
    19. Guillouet, Louise & Martimort, David, 2023. "Acting in the Darkness," TSE Working Papers 23-1411, Toulouse School of Economics (TSE), revised Feb 2026.
    20. van den Bergh, Jeroen C.J.M., 2008. "Optimal diversity: Increasing returns versus recombinant innovation," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 565-580, December.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:usuesp:28356. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/edusuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.