Publication

A note on the tree-cutting problem in a stochastic environment

Yin, Runsheng and David H. Newman

The optimal harvest rule in a stochastic world, proposed by Clarke and Reed, ignored the additional rental and management costs incurred if a harvest is postponed. Noting the critical role these costs play in any practical decision-making process, we modify the Clarke-Reed rule and derive a set of comparable but more meaningful analytical results. We further argue that there no longer exist stochastic counterparts of the Wicksellian and Faustmann "tree-cutting" problems once land rent and management expenditure are explicitly included in the harvest rule formulation.

Fiscal Year: fy98 ·  Problem Area: pa98-1 ·  Source: extra   <== Explain

Citation: Yin, Runsheng and David H. Newman. 1995. A note on the tree-cutting problem in a stochastic environment. Journal of Forest Economics 1:181-190.

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