Risk Management Behavior of a Forest Owner to Address Growth Risk

Marielle Brunette () and Stéphane Couture

Agricultural and Resource Economics Review, 2013, vol. 42, issue 2, 16

Abstract: We analyze risk management behavior (financial savings versus physical savings) of a private forest owner who values amenities in relation to uncertainty about timber growth. In a two-period model, we study the properties of optimal current and future harvesting and risk management decisions. We show that the forest owner chooses the tool with the highest rate of return unless both risk management instruments are perfect substitutes. We prove that future harvesting is greater under physical savings than under financial savings. Comparative static results on amenity preferences, incomes, forest stocks, timber prices, and opportunity costs are investigated.

Keywords: Resource/Energy Economics and Policy; Risk and Uncertainty (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (8)

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Journal Article: Risk Management Behavior of a Forest Owner to Address Growth Risk (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:arerjl:155526

DOI: 10.22004/ag.econ.155526

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