Optimal escapement levels on renewable resource management under process uncertainty: some implications of convex unit harvest cost

Koji Kotani, Makoto Kakinaka and Hiroyuki Matsuda
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Hiroyuki Matsuda: Yokohama National University

Environmental Economics and Policy Studies, 2008, vol. 9, issue 2, No 3, 107-118

Abstract: Abstract The terminology of renewable resource management spans not only prototype harvesting problems but also various new types such as invasive species problems. In all of these problems, process uncertainty of stock growth associated with environmental variability is one of the critical factors that significantly affects the management efficiency. While it may seem that a series of past research has fully examined optimal policy under process uncertainty, the case of convex unit harvest costs has not been fully characterized yet. Focusing on such a case, this article addresses how the degree of process uncertainty affects optimal escapement level. The result suggests that optimal escapement level does not monotonically vary with process uncertainty. In many plausible cases, it should be adapted in a U-shaped manner, which is in contrast with conventional wisdom.

Keywords: Renewable resource management; Constant escapement rule; Process uncertainty; Convex unit harvest cost (search for similar items in EconPapers)
Date: 2008
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Journal Article: Optimal escapement levels on renewable resource management under process uncertainty: some implications of convex unit harvest cost (2008)
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DOI: 10.1007/BF03353985

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