This paper provides a continuous-time "Ricardian" model of forestry, where, in response to an increase in timber demand, forest cultivation is progressively intensified on the most fertile lands and/or extended to less fertile qualities of lands. It is shown that, at a given level of the rate of interest, a set of "break through timber prices" gives the \emph{order of fertility} (i.e., the order in which the different qualities of land are taken into cultivation) and that, for each land, there is a "threshold timber price" above which the prices of trees standing on the land are positive. Since for each land the "break through price" is higher than the "threshold price", Ricardo is shown to be right that, given not all of what "is annually paid by a farmer to his landlord" can be considered rent, a higher demand for timber could simply raise those components of the compensation that are not rent.
A Ricardian Model of Forestry
FRENI, Giuseppe
2015-01-01
Abstract
This paper provides a continuous-time "Ricardian" model of forestry, where, in response to an increase in timber demand, forest cultivation is progressively intensified on the most fertile lands and/or extended to less fertile qualities of lands. It is shown that, at a given level of the rate of interest, a set of "break through timber prices" gives the \emph{order of fertility} (i.e., the order in which the different qualities of land are taken into cultivation) and that, for each land, there is a "threshold timber price" above which the prices of trees standing on the land are positive. Since for each land the "break through price" is higher than the "threshold price", Ricardo is shown to be right that, given not all of what "is annually paid by a farmer to his landlord" can be considered rent, a higher demand for timber could simply raise those components of the compensation that are not rent.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
