Resource Economics

Resource Economics is a text for students with a background in calculus and intermediate microeconomics and a familiarity with the spreadsheet software Excel.

The book covers basic concepts (Chapter 1), shows how to set up spreadsheets to solve simple dynamic allocation problems (Chapter 2), and presents economic models for fisheries, forestry, nonrenewable resources, and stock pollutants (Chapters 3-6).

Chapter 7 examines the maximin utility criterion when the utility of a generation depends on consumption of a manufactured good, harvest from a renewable resource, and extraction from a nonrenewable resource. Within the text, numerical examples are posed and solved using Excel's Solver.

Exercises are included at the end of each chapter. These problems help make concepts operational, develop economic intuition, and serve as a bridge to the study of real-world problems in resource management.

"Jon Conrad's second edition of Resource Economics is an articulate, well-organized presentation of key applications of intertemporal economics to problems of natural resources. More than a routine update of the first edition, it admirably balances theoretical rigor and clarity in the presentation of models, with the kinds of institutional discussions that motivate students to think about research questions." - Robert T. Deacon, University of California, Santa Barbara

Preface to the Second Edition: What Stayed, What Went, What's New?	p. xi
Acknowledgments	p. xiii
Basic Concepts	p. 1
Renewable, Nonrenewable, and Environmental Resources	p. 1
Population Dynamics: Simulation, Steady State, and Local Stability	p. 5
Extraction of a Nonrenewable Resource	p. 10
Discounting	p. 11
A Discrete-Time Extension of the Method of Lagrange Multipliers	p. 17
Asymptotic Depletion of a Nonrenewable Resource	p. 25
The Maximum Principle and Dynamic Programming in Discrete Time	p. 26
Dynamic Programming in a Two-Period, Two-State Model	p. 30
A Markov Decision Model and Stochastic Dynamic Programming	p. 32
Exercises	p. 34
Solving Numerical Allocation Problems Using Excel's Solver	p. 41
Introduction and Overview	p. 41
Optimal Rotation for an Even-Aged Forest	p. 42
Solving an Implicit Equation for the Optimal Steady-State Fish Stock	p. 45
Solving an Implicit Equation for the Optimal Date of Exhaustion	p. 47
Optimal First-Period Harvest in a Two-Period, Two-State Model	p. 47
The Optimal Linear Harvest Policy	p. 50
Optimal Escapement in a Finite-Horizon Deterministic Model	p. 52
Optimal Escapement for One Realization (Seed 1) of Z_t+1	p. 53
An Optimal Depletion Problem: The Mine Manager's Problem	p. 55
Approximating the Asymptotic Approach to a Bioeconomic Optimum	p. 58
The Most Rapid Approach Path to an Optimal Pollution Stock	p. 63
Optimal Escapement with Stochastic Growth	p. 67
Exercises	p. 69
The Economics of Fisheries	p. 75
Introduction and Overview	p. 75
Net Growth	p. 76
Fishery Production Functions	p. 79
The Yield-Effort Function	p. 82
The Static Model of Open Access	p. 84
The Dynamic Model of Open Access	p. 85
Regulated Open Access	p. 90
Maximization of Static Rent	p. 95
Present-Value Maximization	p. 97
Traditional Management Policies	p. 102
Bioeconomic or Incentive-Based Management Policies	p. 105
Marine Reserves	p. 120
Exercises	p. 126
The Economics of Forestry	p. 132
Introduction and Overview	p. 132
The Volume Function and Mean Annual Increment	p. 133
The Optimal Single Rotation	p. 135
The Faustmann Rotation	p. 136
An Example	p. 139
Timber Supply	p. 143
The Optimal Stock of Old-Growth Forest	p. 146
Exercises	p. 149
The Economics of Nonrenewable Resources	p. 153
Introduction and Overview	p. 153
A Simple Model	p. 154
Hotelling's Rule	p. 156
The Inverse Demand Curve	p. 157
Extraction and Price Paths in the Competitive Industry	p. 159
Extraction and Price Paths under Monopoly	p. 164
Reserve-Dependent Costs	p. 167
Exploration	p. 171
The Economic Measure of Scarcity	p. 176
A Postscript to "Betting the Planet"	p. 195
Exercises	p. 196
Stock Pollutants	p. 200
Introduction and Overview	p. 200
The Commodity-Residual Transformation Frontier	p. 202
Damage Functions and Welfare	p. 204
A Degradable Stock Pollutant	p. 207
Diffusion and a Nondegradable Stock Pollutant	p. 212
Optimal Extraction with a Nondegradable Waste	p. 220
Climate Change	p. 223
Emission Taxes and Marketable Pollution Permits	p. 229
Exercises	p. 238
Maximin Utility with Renewable and Nonrenewable Resources	p. 242
Introduction and Overview	p. 242
The Maximin Criterion	p. 244
The Gini Coefficient	p. 246
Growth with Resources, Intergenerational Utility, and the Maximin Criterion	p. 248
Overlapping Generations	p. 255
Complications	p. 261
An Exercise	p. 262
Annotated Bibliography	p. 263
Index	p. 283
Table of Contents provided by Ingram. All Rights Reserved.

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