The Forest Rotation Problem with Stochastic Harvest and Amenity Value
نویسندگان
چکیده
We present a general approach to study optimal rotation policy with amenity valuation under stochastic forest stand value. We state a set of weak conditions under which a unique optimal harvesting threshold exists and derive the value of the optimal policy. We characterize the impact of forest stand value volatility on both the total and the marginal expected cumulative present value of the revenues accrued from amenities. We also illustrate our results numerically and find that depending on the precise characteristics of amenity valuation higher forest stand value volatility may accelerate the rotation policy by decreasing the optimal harvesting threshold.
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