Optimal Private and Public Harvesting Under Spatial and Temporal Interdependence

31 Pages Posted: 23 May 2001

See all articles by Erkki Koskela

Erkki Koskela

University of Helsinki - Department of Political and Economic Studies; CESifo (Center for Economic Studies and Ifo Institute); Bank of Finland - Research Department; IZA Institute of Labor Economics

Markku Ollikainen

University of Helsinki - Department of Political and Economic Studies

Date Written: April 2001

Abstract

This paper extends the Hartman model to include the case where two adjacent stands may be interdependent in the provision of amenity services. We show first that the relationship between the focal and exogenous rotation age depends on the nature of their temporal interdependence, i.e., on what happens to the degree of substitutability or complementarity between the stands when the rotation age of the private focal stand changes. We then apply this analysis to the determination of public rotation age in a two-stage game where the government first decides upon its harvesting and private harvesting is chosen in the second stage. Several new rules are derived for the socially optimal design of public harvesting depending on the nature of interdependence between private and public stands as well as on whether citizens have access to private forests for recreation or not.

Keywords: Substitutability/Complementarity, Amenity Valuation, Private, Public Rotation Age

JEL Classification: Q23, H21

Suggested Citation

Koskela, Erkki and Ollikainen, Markku, Optimal Private and Public Harvesting Under Spatial and Temporal Interdependence (April 2001). CESifo Working Paper Series No. 452. Available at SSRN: https://ssrn.com/abstract=270178

Erkki Koskela (Contact Author)

University of Helsinki - Department of Political and Economic Studies ( email )

P.O. Box 54
FIN-00014 Helsinki
Finland
+358 9 191 8894 (Phone)
+358 9 191 8877 (Fax)

HOME PAGE: http://www.cesifo.de/servlet/page?_pageid=56&_dad=portal30&_schema=PORTAL30&pa_id=7298

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Bank of Finland - Research Department ( email )

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FIN-00101 Helsinki
Finland

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Markku Ollikainen

University of Helsinki - Department of Political and Economic Studies ( email )

P.O. Box 54
FIN-00014 Helsinki
Finland

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