Impacts of declining discount rates on optimal harvest age and land expectation values
Richard J. Brazee, , email@example.com
Richard J. Brazee (2018), "Impacts of declining discount rates on optimal harvest age and land expectation values", Journal of Forest Economics: Vol. 31: No. 1, pp 27-38. http://dx.doi.org/10.1016/j.jfe.2017.06.002
3 Characterizing optimal harvest ages and land expectation values
4 Comparative statics results
5 Multiple optimal harvest ages
6 Non-optimal neighborhoods
Several national governments now require the discount rate for public projects with long planning horizons to decrease over the life of a project. Theoretical results that characterize the impacts of a declining discount rate on optimal harvest age and land expectation values in the Faustmann Model are presented. New results include: derivation of conditions for a sequences of optimal harvest ages and land expectation values, comparative statics results, conditions that must be satisfied for multiple optima, and proof that harvesting is never optimal immediately before a discrete decrease in the discount rate.