Optimal rotation with differently-discounted benefit streams

C. Price

2014, Number 45, May 22-24, 2014, Uppsala, Sweden, 2014, vol. 2014, issue 45, 7

Abstract: The case is often now made that discount rates should decline with time. Underlying reasons include that some kinds benefit (or cost) might be discounted at a lower rate than that used for others : in particular, that rates for carbon values and environmental amenities might be less than that for timber. A lengthening sequence of rotations then arises, whether the benefits are consumptive ones realised at the rotation end, or non-consumptive ones whose annual value increases through the rotation. A timber discount rate lower than that for non-consumptive benefits leads to a shortening sequence of rotations. The results differ importantly from those of discounting at a reducing rate through time.

Keywords: Environmental Economics and Policy; Financial Economics; Production Economics (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:ssfesf:199241

DOI: 10.22004/ag.econ.199241

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