A Stochastic Model for the Growth Period Decision in Forestry

Summary The growth period decision is a familiar problem in economic theory, known from the work of Jevons, Wicksell and Irving Fisher. The aim of this paper is to strengthen the realism of the model when applied to forestry through explicit recognition of uncertainty in the future values of the trees1. In order to investigate whether this extension may be important, a comparison is made between a policy which takes uncertainty into account and one where uncertainty is ignored. 1. The Model