Resource Economics

by Jon M. Conrad

• ISBN13: 9780521649742
• ISBN10: 0521649749
• Format: Paperback
• Copyright: 1999-10-28
• Publisher: Cambridge University Press

Summary

Resource Economics is a text for students with a background in calculus, intermediate microeconomics, and a familiarity with the spreadsheet software Excel. The book covers basic concepts, shows how to set up spreadsheets to solve dynamic allocation problems, and presents economic models for fisheries, forestry, nonrenewable resources, stock pollutants, option value, and sustainable development. Within the text, numerical examples are posed and solved using Excel's Solver. Through these examples and additional exercises at the end of each chapter, students can make dynamic models operational, develop their economic intuition, and learn how to set up spreadsheets for the simulation of optimization of resource and environmental systems.

Author Biography

Jon M. Conrad is Professor of Resource Economics at Cornell University. He taught at the University of Massachusetts, Amherst, from 1973 to 1977 before joining the Cornell faculty in 1978. His research interests focus on the use of dynamic optimization techniques to manage natural resources and environmental quality.

Table of Contents

Preface	ix
Basic Concepts	1	(18)
Renewable, Nonrenewable, and Environmental Resources	1	(3)
Discounting	4	(5)
A Discrete-Time Extension of the Method of Lagrange Multipliers	9	(7)
Questions and Exercises	16	(3)
Solving Numerical Allocation Problems	19	(13)
Introduction and Overview	19	(4)
An Optimal Depletion Problem	23	(4)
An Optimal Harvest Problem	27	(4)
Questions and Exercises	31	(1)
The Economics of Fisheries	32	(27)
Introduction and Overview	32	(1)
Net Growth	32	(3)
Fishery Production Functions	35	(1)
The Yield-Effort Function	36	(1)
The Static Model of Open Access	37	(2)
The Dynamic Model of Open Access	39	(2)
Static Rent Maximization by a Sole Owner	41	(3)
Present Value Maximization	44	(5)
Traditional Management Policies	49	(3)
Bioeconomic Management Policies	52	(2)
ITQ Programs in New Zealand, Australia, and Canada	54	(3)
Questions and Exercises	57	(2)
The Economics of Forestry	59	(18)
Introduction and Overview	59	(1)
The Volume Function and Mean Annual Increment	60	(2)
The Optimal Single Rotation	62	(1)
The Faustmann Rotation	63	(2)
An Example	65	(3)
Timber Supply	68	(2)
The Optimal Stock of Old-Growth Forest	70	(5)
Questions and Exercises	75	(2)
The Economics of Nonrenewable Resources	77	(24)
Introduction and Overview	77	(1)
A Simple Model	78	(1)
Hotelling's Rule	79	(1)
The Inverse Demand Curve	80	(2)
Extraction and Price Paths in the Competitive Industry	82	(4)
Extraction and Price Paths under Monopoly	86	(2)
Reserve-Dependent Costs	88	(3)
Exploration	91	(5)
The Economic Measure of Scarcity	96	(2)
Questions and Exercises	98	(3)
Stock Pollutants	101	(40)
Introduction and Overview	101	(1)
The Commodity-Residual Transformation Frontier	102	(2)
Damage Functions and Welfare	104	(3)
A Degradable Stock Pollutant	107	(6)
Diffusion and a Nondegradable Stock Pollutant	113	(6)
Optimal Extraction with a Nondegradable Waste	119	(5)
Recycling	124	(3)
Emission Taxes and Marketable Pollution Permits	127	(7)
Questions and Exercises	134	(7)
Option Value and Risky Development	141	(25)
Introduction and Overview	141	(1)
Cost-Benefit Analysis	142	(6)
Option Value in a Simple Two-Period Model	148	(2)
Option Value: An Infinite-Horizon Model	150	(4)
The Trigger Values for Irreversible Decisions	154	(10)
Questions and Exercises	164	(2)
Sustainable Development	166	(23)
Introduction and Overview	166	(1)
Sustainable Development as a Steady State	167	(1)
Intergenerational Altruism and the Stock of a Renewable Resource	168	(5)
Coevolution	173	(9)
Adaptive Development	182	(3)
A Requiem for Sustainable Development?	185	(2)
Questions and Exercises	187	(2)
Annotated Bibliography	189	(20)
B.0 Texts	189	(1)
B.1 Basic Concepts	190	(1)
B.2 Solving Numerical Allocation Problems	191	(2)
B.3 The Economics of Fisheries	193	(2)
B.4 The Economics of Forestry	195	(2)
B.5 The Economics of Nonrenewable Resources	197	(5)
B.6 Stock Pollutants	202	(2)
B.7 Option Value and Risky Development	204	(2)
B.8 Sustainable Development	206	(3)
Index	209