Optimal rotation with differently-discounted benefit streams

The case is often now made that discount rates should decline with time. Underlying reasons include that some kinds benefit (or cost) might be discounted at a lower rate than that used for others: in particular, that rates for carbon values and environmental amenities might be less than that for timber. A lengthening sequence of rotations then arises, whether the benefits are consumptive ones realised at the rotation end, or non-consumptive ones whose annual value increases through the rotation. A timber discount rate lower than that for non-consumptive benefits leads to a shortening sequence of rotations. The results differ importantly from those of discounting at a reducing rate through time.


Editor(s):
Roos, A.
Lönnstedt, L.
Nord, T.
Gong, P.
Stendahl, M.
Issue Date:
Dec 31 2014
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/199241
Published in:
Scandinavian Forest Economics: Proceedings of the Biennial Meeting of the Scandinavian Society of Forest Economics, 2014
Scandinavian Forest Economics: Proceedings of the Biennial Meeting of the Scandinavian Society of Forest Economics
Number 45
Page range:
48-57
Total Pages:
7

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