TY - JOUR
T1 - Renewable resource management with environmental prediction
AU - Costello, Christopher
AU - Polasky, Stephen
AU - Solow, Andrew
PY - 2001
Y1 - 2001
N2 - Variations in environmental conditions affect renewable resource growth. The ability to predict such variations is improving, providing scope for improved management. We generalize a common stochastic stock recruitment model to explore how optimal management changes with environmental prediction. We obtain three main results. First, while it might seem that a prediction of adverse future conditions should lead to more conservative management, the opposite may be true. Second, optimal management requires only a one-period-ahead forecast, suggesting forecast accuracy is more important than forecast lead time. Finally, we derive conditions on environmental fluctuations guaranteeing positive optimal harvest in every period.
AB - Variations in environmental conditions affect renewable resource growth. The ability to predict such variations is improving, providing scope for improved management. We generalize a common stochastic stock recruitment model to explore how optimal management changes with environmental prediction. We obtain three main results. First, while it might seem that a prediction of adverse future conditions should lead to more conservative management, the opposite may be true. Second, optimal management requires only a one-period-ahead forecast, suggesting forecast accuracy is more important than forecast lead time. Finally, we derive conditions on environmental fluctuations guaranteeing positive optimal harvest in every period.
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U2 - 10.1111/0008-4085.00070
DO - 10.1111/0008-4085.00070
M3 - Article
AN - SCOPUS:0012048148
SN - 0008-4085
VL - 34
SP - 196
EP - 211
JO - Canadian Journal of Economics
JF - Canadian Journal of Economics
IS - 1
ER -