An Equilibrium Model of Habitat Conservation under Uncertainty and Irreversibility

Luca Di Corato (), Michele Moretto and Sergio Vergalli

No 122, "Marco Fanno" Working Papers from Dipartimento di Scienze Economiche "Marco Fanno"

Abstract: In 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.

Keywords: optimal stopping; deforestation; payments for environmental services; Natural Resources Management. (search for similar items in EconPapers)
JEL-codes: C61 D81 Q24 Q58 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2010-12
New Economics Papers: this item is included in nep-agr, nep-cmp, nep-dge and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: An Equilibrium Model of Habitat Conservation under Uncertainty and Irreversibility (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pad:wpaper:0122

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