Forest Conservation in Costa Rica When Nonuse Benefits are Uncertain But Rising

Posted: 24 Apr 2002

See all articles by Erwin H. Bulte

Erwin H. Bulte

Tilburg University - Department of Economics; Wageningen University

Daan van Soest

Tilburg University - CentER & Department of Economics

G. Cornelis van Kooten

University of Victoria - Economics

Robert A. Schipper

Wageningen University - Development Economics Group

Abstract

Stochastic dynamic programming is used to investigate optimal holding of primary tropical forest in humid Costa Rica when future nonuse benefits of forest conservation are uncertain and increasing. The quasi-option value of maintaining primary forests is included as a component of investment in natural capital. Although the impact of uncertainty on conservation incentives is substantial, our results indicate that a rising trend in future benefits and compensation by the international community for beneficial spillovers are more important factors in determining optimal holdings of forest stocks. Without compensatory payments, however, further deforestation may be warranted.

Suggested Citation

Bulte, Erwin H. and van Soest, Daan P. and van Kooten, G. Cornelis and Schipper, Robert A., Forest Conservation in Costa Rica When Nonuse Benefits are Uncertain But Rising. American Journal of Agricultural Economics, Vol. 84, pp. 150-160, 2002. Available at SSRN: https://ssrn.com/abstract=308797

Erwin H. Bulte (Contact Author)

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 9111 (Phone)

Wageningen University

Hollandseweg 1
6706 KN
Wageningen
Netherlands

Daan P. Van Soest

Tilburg University - CentER & Department of Economics ( email )

P.O. Box 90153
5000 LE Tilburg
Netherlands
+31 13 466 2072 (Phone)

G. Cornelis Van Kooten

University of Victoria - Economics ( email )

Victoria V8W Y2Y, BC
Canada

Robert A. Schipper

Wageningen University - Development Economics Group ( email )

Hollandseweg 1
WAGENINGEN, 6706 KN
Netherlands
+ 31 317 4 83991 (Phone)
+ 31 317 4 84037 (Fax)

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