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.
Authors: | Price, C. |
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Published in: |
Scandinavian Forest Economics: Proceedings of the Biennial Meeting of the Scandinavian Society of Forest Economics. - Nordiska Skogsekonomiska Föreningen - SSFE. - 45
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Publisher: |
Nordiska Skogsekonomiska Föreningen - SSFE |
Subject: | differential discount rates | optimal rotation | Environmental Economics and Policy | Financial Economics | Production Economics |
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