Document Type

Article

Journal/Book Title/Conference

Economic Research Institute Study paper

Publisher

Utah State University

Publication Date

3-1-1986

Rights

Copyright for this work is held by the author. Transmission or reproduction of materials protected by copyright beyond that allowed by fair use requires the written permission of the copyright owners. Works not in the public domain cannot be commercially exploited without permission of the copyright owner. Responsibility for any use rests exclusively with the user. For more information contact the Institutional Repository Librarian at digitalcommons@usu.edu.

First Page

1

Last Page

12

Abstract

The introduction of the "maximum principle" by Pontryagin et al. (1964) elevated optimal control as a research tool in economics to prominence. Optimal control models describe the evolvement of a system over a time horizon and determine optimal levels of decision variables over time. Anderson (1976), in comparing the net present value (NPV) model of forest rotation and the optimal control approach to resource management, generated a rotation rule comparable to the Faustmann rule (1968). But both of these approaches assume that timber production is the sole objective of forest management and abstract from multiple forest benefits. The purpose of the present paper is to provide such a comparison when a forest has, besides timber value, a flow of value of recreational services (a general term used to capture non-timber uses of a standing forest) when standing. Through this exercise it is shown that an optimal control model of a slightly different form than the one proposed by Anderson (1976 ) suffices to generate a rotation rule-comparable to a more general Faustmann rule derived by, e.g., Hartman (1976). The basic theoretical model employed in this paper uses the framework provided by Berck (1981) and Anderson (1976).

Download

Share

COinS