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Marine Resource Economics >
Volume 01, Number 2, 1984 >
Please use this identifier to cite or link to this item:
http://purl.umn.edu/47458
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| Title: | Uncertainty in Fisheries Economics: The Role of the Discount Rate |
| Authors: | Plourde, Charles
Bodell, Richard |
| Issue Date: | 1984 |
| Series/Report no.: | Marine Resource Economics
Vol. 1 No. 2 |
| Abstract: | Standard models of management of a single-species fishery generally assume that the biomass is of known size and that it is generated by a well-specified deterministic
growth law. In reality the biomass is of uncertain size and usually subject to random growth. Several authors have addressed the problem of random growth assuming a known initial biomass and have shown that lowering the planning discount rate proportional to the variance is an optimal planning procedure assuming small perturbations.
In this paper we assume that the growth function is nonrandom but dependent upon a biomass stock of unknown size. We shall show that a planner should raise the discount rate
relative to the certainty equivalent case by an amount related to society's distaste for risk in order to manage the biomass optimally over time. As is to be expected, the optimal steady-state biomass will be less than would occur in a situation of certainty. |
| URI: | http://purl.umn.edu/47458 |
| Identifiers: | 0738-1360 |
| Institution/Association: | Marine Resource Economics>Volume 01, Number 2, 1984 |
| Total Pages: | 16 |
| From Page: | 155 |
| To Page: | 170 |
| Collections: | Volume 01, Number 2, 1984
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