Uncertainty and amenity values in renewable resource economics

Gilles Lafforgue

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Abstract: In this paper, we study the effects of amenities and uncertainty on the optimal exploitation of a renewable resource. First, if society displays a protection motive (in the presence of amenities), its optimal harvesting strategy will be more conservative. Second, we show that ecological uncertainty leads society to develop the opposite behavior, thus reducing its exposition towards risk. A stationary analysis is undertaken to analytically quantify and compare these two effects. With a Gompertz natural regeneration function and a proportional risk, the amenity effect is proved to prevail if and only if stochastic fluctuations on the resource stock are not too large.

Keywords: AMENITIES; RENEWABLE RESOURCES; RISK EXPOSITION (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (5)

Published in Environmental and Resource Economics, 2005, 31 (3), pp.369-383. ⟨10.1007/s10640-005-1671-z⟩

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Journal Article: Uncertainty and Amenity Values in Renewable Resource Economics (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02672411

DOI: 10.1007/s10640-005-1671-z

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