Farm forestry investment in Ireland under uncertainty
Citation:
Wiemers, Emily; Behan, Jasmina. 'Farm forestry investment in Ireland under uncertainty'. - Economic & Social Review, Vol. 35, No. 3, Winter, 2004, pp. 305-320, Dublin: Economic & Social Research InstituteDownload Item:
Vol 35_3Wiemer.pdf (Published (publisher's copy) - Peer Reviewed) 85.75Kb
Abstract:
This paper develops a model to explain farmers? decision to move from agricultural
activities to forestry. Farmers in Ireland have strong links with land and are reluctant to enter into forestry even when the returns from it exceed those from farming. This paper examines whether the reluctance among farmers to plant forestry originates in the nature of forestry investment, which is characterised by the irreversibility of the decision, the uncertainty about future returns, and the ability to delay investment in forestry. In this paper we use a real options method and focus on the contribution of uncertainty in returns and costs to the decision to invest in forestry.
Author: Wiemers, Emily; Behan, Jasmina
Publisher:
Economic & Social StudiesType of material:
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Full text availableKeywords:
Agriculture, Forestry, Decision making, Ireland, InvestmentISSN:
0012-9984Licences: