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An ecological golden rule

Ram Fishman and Chandra Kiran B Krishnamurthy

Resource and Energy Economics, 2021, vol. 64, issue C

Abstract: Most renewable biotic resources are subject to random variability in natural growth. We investigate the implications of such variability for long-term management by a risk averse social planner, who maximizes expected long-run utility. In the canonical model of a stochastic fishery, we show that the optimal level of harvesting effort need not necessarily be reduced by variability in stock growth. However, optimal effort is reduced if variability of growth increases for smaller base populations, as suggested in the ecology literature.

Keywords: Stochastic growth; Natural resource; Golden rule; Q20; Q22 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.reseneeco.2021.101219

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