In this lecture, we review an example calculation of the efficient quantities to extract from a private, non-renewable resource (which follow's the prediction of Hotelling's Rule) and use that to motivate our introduction to modeling of renewable resource management. We start our discussion of renewable resources with an optimal aging problem where a private landowner determines which rotation (period before harvesting and then repeating) to use in order to maximize the total volume of wood produced by the woodlot. This results in the "biological rotation" (which maximizes the mean annual increment, MAI). In the next lecture, we will add in the time value of money (Wicksell Rotation) and alternative uses for the land (Faustmann Rotation) and alternative uses for the natural resource itself (like maintaining species habitat).
Whiteboard notes from this lecture can be found at: https://www.dropbox.com/s/kseey7bpl4e9tbx/LectureD4-2020-11-05-Economics_of_Renewable_Natural_Resources-Part_1.pdf?dl=0
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