Renewable resource harvesting, market, and the no-deficit rule: The case of the French public timber supply

Philippe Delacote and Alexandre Sauquet

No 2015-09, Working Papers - Cahiers du LEF from Laboratoire d'Economie Forestiere, AgroParisTech-INRA

Abstract: This paper assesses the links between prices, renewable resource harvesting, market power, sectorial optimum, and the no-deficit condition. The no-deficit condition implies that income must compensate for expenses each and every period. A direct implication is that the harvest behavior of the resource manager depends on a price threshold. If prices go below this threshold, harvest has to increase when the price decreases, in order to meet the budget constraint. This can conflict with the maximization of consumers and suppliers surpluses in the considered sector. We develop a theoretical model and test its predictions empirically for the case of the Office National des Forêts (ONF).

Keywords: No-deficit rule; Forest Sector; Public Agency; Threshold models (search for similar items in EconPapers)
JEL-codes: D4 H62 H83 Q32 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2015-09, Revised 2015-09
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