THE IMPACT OF INFORMATION ON LAND DEVELOPMENT: A DYNAMIC AND STOCHASTIC ANALYSIS

Amitrajeet Batabyal

No 28356, Economics Research Institute, ERI Study Papers from Utah State University, Economics Department

Abstract: In a two-period model, economists such as K.J. Arrow, A.C. Fisher, and C. Henry, have shown that when development is both indivisible and irreversible, a developer who ignores the possibility of obtaining new information about the outcome of such development will invariably underestimate the benefits of preservation and hence favor development. In this note, I extend the AFH analysis in two directions. I model the land development problem in a dynamic framework, explicitly specifying an information production function. In such a setting, I then ask and answer the question concerning when development should take place. Forthcoming in Journal of Environmental Management

Keywords: Land; Economics/Use (search for similar items in EconPapers)
Pages: 10
Date: 1995
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Persistent link: https://EconPapers.repec.org/RePEc:ags:usuesp:28356

DOI: 10.22004/ag.econ.28356

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