Threshold price as an economic indicator for sustainable forest management under stochastic log price |
| |
| Authors: | Atsushi Yoshimoto |
| |
| Institution: | (1) Department of Mathematical Analysis and Statistical Inference, Institute of Statistical Mathematics, 4-6-7 Minami-Azabu, Minato Tokyo, 106-8569, Japan |
| |
| Abstract: | We seek the minimum harvest age and threshold price for sustaining forest management by constructing a stochastic dynamic
programming model using a geometric mean-reverting process for log price dynamics. Three decisions—“Wait for harvest”, “Harvest
& Plant”, and “Harvest & Abandon”—are assumed. The applied growth simulator is deterministic. Using the monthly time series
data of sugi (Cryptomeria japonica) log price from 1975 to 2006, our analyses show that when the reverted mean is lower than the cost, the minimum harvest age
increases as the current price approaches the threshold price, then declines. In other cases with a higher reverted mean,
the minimum harvest age increases as the current or initial log price decreases. When the initial log price approaches the
threshold price, the minimum harvest age tends to increase. These phenomena can be used to evaluate the possibility of management
abandonment under a stochastic situation of log price dynamics. |
| |
| Keywords: | Geometric mean-reverting process Log price Stochastic differential equation Stochastic dynamic programming Sustainable forest management |
| 本文献已被 SpringerLink 等数据库收录！ |
|
