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Optimally managing a stochastic renewable resource under general economic conditions

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dc.creator McGough, Bruce
dc.creator Plantinga, Andrew J.
dc.creator Costello, Christopher
dc.date.accessioned 2010-03-15T13:39:53Z
dc.date.available 2010-03-15T13:39:53Z
dc.date.issued 2009-12-28
dc.identifier.citation Bruce McGough, Andrew J. Plantinga, and Christopher Costello (2009) “Optimally Managing a Stochastic Renewable Resource under General Economic Conditions,” The B.E. Journal of Economic Analysis & Policy: Vol. 9: Iss. 1 (Contributions), Article 56. Available at: http://www.bepress.com/bejeap/vol9/iss1/art56 en
dc.identifier.uri http://hdl.handle.net/1957/14967
dc.description Article appears in and is copyrighted by Berkeley Electronic Press (http://www.bepress.com/) en
dc.description.abstract Empirical evidence indicates that environmental fluctuations have important effects on fisheries production. However, existing analytical solutions of stochastic fisheries models have been produced only under highly simplified economic and biological conditions. The main contribution of this paper is to derive under general conditions a policy function for the management of a stochastic fishery. Our model includes general specifications of demand and cost relationships and a stochastic biological growth function with serially-correlated shocks. Applying methods from the theory of dynamic stochastic general equilibrium modeling and multivariate linear expectational difference equations, we derive a linear approximation of the solution to the model. Our main result is a reduced-form expression for an approximation to optimal escapement, which is shown to be a function of the current stock, past environmental shocks, and model parameters. This theoretically-grounded policy function has intuitive appeal, yields insights into comparative statics, and provides a theoretically-grounded, practical starting point for fisheries management. en
dc.language.iso en_US en
dc.publisher Berkeley Electronic Press en
dc.relation.ispartofseries The B.E. Journal of Economic Analysis & Policy en
dc.relation.ispartofseries Vol. 9 Issue 1 (2009) en
dc.subject dynamic stochastic general equilibrium en
dc.subject fisheries management en
dc.subject renewable resources en
dc.subject stochasticity en
dc.title Optimally managing a stochastic renewable resource under general economic conditions en
dc.type Article en
dc.identifier.doi 10.2202/1935-1682.2313

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