@article{Hegrenes:6945,
      recid = {6945},
      author = {Hegrenes, Agnar and Lien, Gudbrand D. and Hardaker, J.  Brian},
      title = {Optimal Length of Leys in an Area with Winter Damage  Problems – Optimal Economic Lengths of Leys},
      address = {2002},
      number = {1026-2016-82045},
      series = {Conference Papers},
      pages = {23},
      year = {2002},
      abstract = {The optimal economic life cycle of grass leys with winter  damage problems in northern Norway and the threshold of  winter damage before it is profitable to re-seed grasses  are investigated. The loss in profit of a sub-optimal  strategy compared to an optimal strategy is briefly  discussed. An infinite horizon stochastic dynamic  programming model including a normally distributed yield  process with possibilities for discrete downward jumps  is
developed. The jump process reflects the sudden drop in  production after winter damage. Normally the yield of ley  increases the first few years after a year with downward  jump, and this dynamic is included in the model. The  transition probabilities used in the model are estimated  with Monte Carlo simulation. Our result show that, in the  case of winter damage of 50% or more compared to  fields
without winter damage, it is optimal to replace the  ley immediately. If the winter damage is limited to 20-40%  of the yield of fields without winter damage, the  replacement decision depends on the age of the ley and the  current yield level. It does not always pay to replace  immediately mildly winter damaged fields that are still  producing high yields. It does not pay to replace a ley if  there has been no winter damage since establishment and if  the relative
yield level is ‘satisfactory’ at least until  the first episode of winter damage occurs.},
      url = {http://ageconsearch.umn.edu/record/6945},
      doi = {https://doi.org/10.22004/ag.econ.6945},
}