Criteria for Determining the Optimum Replacement Pattern

Anthony H. Chisholm

American Journal of Agricultural Economics, 1966, vol. 48, issue 1, 107-112

Abstract: This article is an attempt to clarify some confusion that has been apparent in the literature of agricultural economics in recent years with respect to providing a criterion for determining the optimum replacement pattern for long-lived assets. In particular, for appreciating assets of the type represented by growing timber, the previous criteria have generally overlooked an important item of marginal cost: namely, the interest on the total revenue obtainable from the sale of the asset. These criteria have hence provided a replacement pattern which is longer than the the optimum.

Date: 1966
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:48:y:1966:i:1:p:107-112.

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