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Optimal Escapement Levels on Renewable Resource Management under Process Uncertainty: Some Implications of Convex Unit Harvest Cost

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Abstract

The terminology of renewable resource management becomes to span not only prototype harvesting problems but also various new types such as invasive species one. In all of these problems, process uncertainty of stock growth associated with environmental variability is one of the critical factors that significantly affects the management efficiency. While it may seem that a series of past researches fully examine optimal policy under process uncertainty, the case of convex unit harvest costs has not been fully characterized yet. Focusing on such a case, this paper addresses how the degree of process uncertainty affects optimal escapement level. The result suggests that optimal escapement level does not monotonically vary with process uncertainty. In many plausible cases, it should be adapted in a U-shaped manner, which is in contrast with the conventional wisdom.

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  • Koji Kotani & Makoto Kakinaka & Hiroyuki Matsuda, 2008. "Optimal Escapement Levels on Renewable Resource Management under Process Uncertainty: Some Implications of Convex Unit Harvest Cost," Working Papers EMS_2008_05, Research Institute, International University of Japan.
    • Handle: RePEc:iuj:wpaper:ems_2008_05
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    References listed on IDEAS

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    1. Moxnes, Erling, 2003. "Uncertain measurements of renewable resources: approximations, harvesting policies and value of accuracy," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 85-108, January.
    2. Sethi, Gautam & Costello, Christopher & Fisher, Anthony & Hanemann, Michael & Karp, Larry, 2005. "Fishery management under multiple uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 50(2), pages 300-318, September.
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    4. Christopher Costello & Stephen Polasky & Andrew Solow, 2001. "Renewable resource management with environmental prediction," Canadian Journal of Economics, Canadian Economics Association, vol. 34(1), pages 196-211, February.
    5. Koji Kotani & Makoto Kakinaka & Hiroyuki Matsuda, 2006. "Dynamic Economic Analysis on Invasive Species Management: Some Policy Implications of Catchability," Working Papers EMS_2006_16, Research Institute, International University of Japan.
    6. Reed, William J., 1979. "Optimal escapement levels in stochastic and deterministic harvesting models," Journal of Environmental Economics and Management, Elsevier, vol. 6(4), pages 350-363, December.
    7. Koji Kotani & Makoto Kakinaka & Hiroyuki Matsuda, 2007. "Programs on Invasive Species Management under Growth Uncertainty and Measurement Error," Working Papers EMS_2007_01, Research Institute, International University of Japan.
    8. Jean-Jacques Laffont, 1989. "The Economics of Uncertainty and Information," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121360, December.
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