Arbeitspapier
Land conversion pace under uncertainty and irreversibility: Too fast or too slow?
In this paper stochastic dynamic programming is used to investigate land conversion decisions taken by a multitude of landholders under uncertainty about the value of environmental services and irreversible development. We study land conversion under competition on the market for agricultural products when voluntary and mandatory measures are combined by the Government to induce adequate participation in a conservation plan. We study the impact of uncertainty on the optimal conversion policy and discuss conversion dynamics under different policy scenarios on the basis of the relative long-run expected rate of deforestation. Interestingly, we show that uncertainty, even if it induces conversion postponement in the short-run, increases the average rate of deforestation and reduces expected time for total conversion in the long run. Finally, we illustrate our findings through some numerical simulations.
- Language
-
Englisch
- Bibliographic citation
-
Series: Nota di Lavoro ; No. 84.2011
- Classification
-
Wirtschaft
Optimization Techniques; Programming Models; Dynamic Analysis
Criteria for Decision-Making under Risk and Uncertainty
Renewable Resources and Conservation: Land
Environmental Economics: Government Policy
- Subject
-
Optimal Stopping
Deforestation
Payments for Environmental Services
Natural Resources Management
- Event
-
Geistige Schöpfung
- (who)
-
Di Corato, Luca
Moretto, Michele
Vergalli, Sergio
- Event
-
Veröffentlichung
- (who)
-
Fondazione Eni Enrico Mattei (FEEM)
- (where)
-
Milano
- (when)
-
2011
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Di Corato, Luca
- Moretto, Michele
- Vergalli, Sergio
- Fondazione Eni Enrico Mattei (FEEM)
Time of origin
- 2011
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