Resource EconomicsResource Economics is a text for students with a background in calculus, intermediate microeconomics, and a familiarity with the spreadsheet software Excel. The book covers basic concepts, shows how to set up spreadsheets to solve dynamic allocation problems, and presents economic models for fisheries, forestry, nonrenewable resources, stock pollutants, option value, and sustainable development. Within the text, numerical examples are posed and solved using Excel's Solver. Through these examples and additional exercises at the end of Chapters 1 through 8, students can make dynamic models operational, develop their economic intuition, and learn how to set up spreadsheets for the simulation of optimization of resource and environmental systems. |
Contents
Basic Concepts | 8 |
Discounting | 8 |
A DiscreteTime Extension of the Method of Lagrange Multipliers | 9 |
Questions and Exercises | 16 |
Solving Numerical Allocation Problems | 19 |
An Optimal Depletion Problem | 23 |
An Optimal Harvest Problem | 27 |
Questions and Exercises | 31 |
The Economic Measure of Scarcity | 96 |
Questions and Exercises | 98 |
Stock Pollutants | 101 |
The CommodityResidual Transformation Frontier | 102 |
Damage Functions and Welfare | 104 |
A Degradable Stock Pollutant | 107 |
Diffusion and a Nondegradable Stock Pollutant | 113 |
Recycling | 120 |
The Economics of Fisheries | 32 |
Fishery Production Functions | 35 |
The YieldEffort Function | 36 |
The Static Model of Open Access | 37 |
The Dynamic Model of Open Access | 39 |
Static Rent Maximization by a Sole Owner | 41 |
Present Value Maximization | 44 |
Traditional Management Policies | 49 |
Bioeconomic Management Policies | 52 |
ITQ Programs in New Zealand Australia and Canada | 54 |
Questions and Exercises | 57 |
The Economics of Forestry | 59 |
The Volume Function and Mean Annual Increment | 60 |
The Optimal Single Rotation | 62 |
The Faustmann Rotation | 63 |
An Example | 65 |
Timber Supply | 68 |
The Optimal Stock of OldGrowth Forest | 70 |
Questions and Exercises | 75 |
The Economics of Nonrenewable Resources | 77 |
A Simple Model | 78 |
Hotellings Rule | 79 |
The Inverse Demand Curve | 80 |
Extraction and Price Paths in the Competitive Industry | 82 |
Extraction and Price Paths under Monopoly | 86 |
ReserveDependent Costs | 88 |
Exploration | 91 |
Emission Taxes and Marketable Pollution Permits | 123 |
Questions and Exercises | 130 |
Option Value and Risky Development | 137 |
CostBenefit Analysis | 138 |
Option Value in a Simple TwoPeriod Model | 144 |
Option Value An InfiniteHorizon Model | 146 |
The Trigger Values for Irreversible Decisions | 150 |
Questions and Exercises | 160 |
Sustainable Development | 162 |
Sustainable Development as a Steady State | 163 |
Intergenerational Altruism and the Stock of a Renewable Resource | 164 |
Coevolution | 169 |
Adaptive Development | 178 |
A Requiem for Sustainable Development? | 181 |
Questions and Exercises | 183 |
Annotated Bibliography | 185 |
Basic Concepts | 186 |
Solving Numerical Allocation Problems | 187 |
The Economics of Fisheries | 189 |
The Economics of Forestry | 191 |
The Economics of Nonrenewable Resources | 193 |
Stock Pollutants | 198 |
Option Value and Risky Development | 200 |
Sustainable Development | 202 |
Index | 205 |
Common terms and phrases
amenity value analysis assume benefits bioeconomic bioeconomic optimum cell Chapter D₁ denote depletion discount rate dynamic Economics and Management effort Environmental Economics expected value exploration expression extraction path Faustmann rotation Figure firm fish stock fishery formula future given harvest decision horizon Hotelling's Rule implies increase initial reserves inverse demand curve investment Journal of Environmental Lagrange multipliers Lagrangian Land Economics marginal cost million monopolist natural resources nonrenewable resource old-growth forest open access optimal extraction optimal single rotation optimal stock option value p₁ period pollution stock present value q₁ QMAX QMIN Questions and Exercises quota R₁ rate of discount rate of extraction reduce remaining reserves renewable resource Resource Economics resource stock result revenue shadow price solve Solver species Spreadsheet static steady stochastic stock pollutant Suppose sustainable development timber tion unit variable vessels X₁ Y₁ yield Z₁ zero