A Hotelling-Faustmann explanation of the structure of christmas tree prices

Tomislav Vukina, Christiana E. Hilmer, Dean Lueck

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

We examine the relationship between a tree price and a tree age (height) using a Hotelling-Faustmann type model of optimal plantation management, which accounts for the possibility of replanting and biological growth. The model predictions are tested using the data on Christmas tree prices in North Carolina collected in December 1997. The estimates show that, in general, the rates of change in prices between adjacent age cohorts reflect a competitive equilibrium in the capital market thus supporting the Hotelling-Faustmann paradigm.

Original languageEnglish (US)
Pages (from-to)513-525
Number of pages13
JournalAmerican Journal of Agricultural Economics
Volume83
Issue number3
DOIs
StatePublished - Jan 1 2001

Keywords

  • Capital theory
  • Discrete time optimal control
  • Uneven-aged forest management

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics

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